New home sales are up as prices fade
Sales of new homes took a step forward as prices saw significant decreases on a monthly and year-over-year basis, according to the latest Monthly New Residential Sales report.
New single-family home sales in April increased 4.1% to an adjusted annual rate of 683,000 compared to the revised March rate of 656,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported this morning.
Sales are also 11.8% above the April 2022 estimate of 611,000.
“A lack of existing inventory supported sales of newly-built, single-family homes in April,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “Even more encouraging, we are seeing sales growth in the more affordable price ranges of $200,000 to $400,000.”
The median sales price of new homes sold in April was $420,800, falling nearly 8% from a median price of $455,800 in the prior month. On a year-over-year basis, the median price fell more than 8% compared to a median price of $458,200 in April 2022.
The average sales price in April fell more than 10% to $501,000 in comparison to an average price of $559,200 in March. On a year-over-year basis, the average price dropped 11% from a cost of $562,400 in April 2022.
“April saw an increase in new home sales as buyers sought new construction even as builders struggle to keep up with demand because of a shortage of distribution transformers and skilled construction workers,” said NAHB Chief Economist Robert Dietz. “Sales for 2023 thus far are still down 9.7% on a year-to-date basis due to elevated interest rates, and sales may weaken in the months ahead given the recent rise in interest rates.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 683,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Here’s how new home sales performed in April 2023 on a regional basis:
- In the Northeast, sales plummeted 58.6% on a month-over-month basis and plunged 46.7% on a year-over-year basis.
- In the Midwest, sales climbed 11.8% for the month and jumped 20.6% compared to April 2022.
- In the South, sales increased 17.8% in April and soared 23.4% on a year-over-year basis.
- The West saw sales decline 9.1% for the month and 2.8% from a year ago.
Click here for the latest Monthly New Residential Sales report.
