New-home sales show modest gain
April's 3.3% creep up from March may be a sign of small increases still to come.
Ah, the sounds and smells of spring: birds chirping, flowers blooming, subcontractors hammering and fresh ink hitting paper.
After a decrease in March, sales of new homes increased 3.3% in April, the Census Bureau and Department of Housing and Urban Development reported today. The seasonally adjusted rate of 343,000 homes sold also represents a 9.9% increase from April 2011.
Get used to the slight increases: They are “in line with our expectations for a continued, modest increase in home sales as buyers gain confidence in the economy and their jobs,” David Crowe, chief economist for the National Association of Home Builders, told MSNBC.
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According to a Bloomberg poll, experts had expected a 2.6% month-to-month gain.
Yesterday, the National Association of Realtors reported that sales of existing homes registered nearly identical increases: up 3.4% in April from March and up 10% from April 2011.
It's slow progress — but progress nonetheless, 4Cast Ltd. economist Sean Incremona told Reuters:
"The new homes sales data is much like what we saw from existing home sales yesterday. … It is still baby steps. This increase of 343,000 still comes in below that February high, which was probably inflated by weather. It does look like we have found a bottom, which is encouraging, but it is still very slow progress at this point."
April's new-home sales volume is still less than half of the 700,000 mark considered normal for a healthy market, according to National Public Radio. But there is hope for coming months: Construction starts were up 2.6% in April from March. Homebuilder confidence also hit its highest level in nearly five years.
The median sale price of new homes also ticked up slightly from March to $235,700.
Regional new-home sale changes between March and April, from the NAHB:
- Midwest: 28.2% increase
- West: 27.5% increase
- Northeast: 7.7% increase
- South: 10.6% decrease
— Tony Stasiek is a producer/editor at MSN Real Estate.