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New home sales fell 5.9% month-over-month in April to a seasonally adjusted annual rate of 863,000 from a downwardly revised 917,000 (from 1.021 million) in March. The median sales price increased 20.0% yr/yr to $372,400 while the average sales price jumped 20.8% to $435,400.

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Mortgage rates have risen from record low levels as the economy reopens from coronavirus-induced restrictions.

April 2021 US New Home Sales

Highlights

  • New home sales 863K versus 950K estimate.
  • Prior month revised lower to 917K from 1021K New home sales declined 5.9% month-over-month in April On a yr/yr basis, new home sales were up 48.3%, from a very depressed comparison period due to the pandemic.
  • Supply 4.4 months versus 4.0 months last month and 6.6 months in April 2020.
  • 316,000 new homes for sale in April,  most in a year

United States New Home Sales

  • Median sale price $372,400 versus 310,100 in April 2020 (up 20.1% YoY).
  • The average sale price was $435,400 up from $400,500 (up 20.8% YoY)
  • Single-family homes -5.9% versus March +7.4%
  • New home sales month-over-month/year-over-year by region: Northeast (-13.7%/+100.0%); Midwest (-8.3%/+46.7%); South (-8.2%/+61.2%); and West (+7.9%/+11.6%).

After months of gains amid record-low interest rates and as people move away from the big cities as they have more flexible work arrangements due to the coronavirus pandemic we saw a slow down. Much was to do with the high costs and prices

New home sales, which are counted when contracts are signed, are being squeezed by high costs for builders and high prices for buyers. This is reulting in the reduced percentage of sales for homes priced under $399,999 and the increased percentage of sales for homes priced over $500,000. The median sales price increased 20.0% yr/yr to $372,400 while the average sales price jumped 20.8% to $435,400. A six-month supply is typically associated with a more balanced market. The percentage of new homes sold for $399,999 or less accounted for 61% of new homes sold versus 65% in March and 69% one year ago. Homes priced over $500,000 accounted for 26% of new homes sold in April versus 19% in March and 15% a year ago.

Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.

The big question is after the lockdown eases and the economy reopens how much damage has been done with the massive unemployment and wealth erosion.

Source:

From The TradersCommunity News Desk

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