Construction continues on a housing plan in Zelienople, Pa., in March 2014.(Photo: Keith Srakocic AP)
New home sales rose 6.4% in April, the Census Bureau said Friday, offering further evidence that the housing market gained some momentum as spring took hold.
Combined with a big upward revision in the March sales estimate, the government’s latest data indicates the market for new homes has been better than economists estimated. But it’s not as healthy as a year ago, either.
“New home sales bounce back to medocrity” was how IHS Global Insight economists Stephanie Karol and Patrick Newport summed up the news in a research note Friday.
“So long as income growth remains low and credit remains tight, progress in the market for new homes will continue slowly,” they said.
The Census Bureau reported sales reached a seasonally adjusted annual rate of 433,000 and March’s results were revised up to 407,000. The previous March estimate was 384,000.
Economists expected a rate of 425,000, according to the median forecast in Action Economics survey. The April 2013 rate was 452,000.
Friday’s report was the second bit of encouraging news on housing in as many days. The National Association of Realtors reported Thursday that existing home sales rose 1.3% in April, the first monthly gain this year. But there too, April’s selling pace was below a year earlier.
New home sales rose in the Midwest and South, but fell in the Northeast and were unchanged in the West, compared with March, according to Census.
The median sales price was $275,800 compared with $279,300 a year ago.
At the April sales rate, there was a 5.3 month supply of homes for sale compared 5.6 months in March.
The housing market’s recovery quickened last year, but has eased in 2014 in the face of last year’s sharp price increases, higher mortgage rates than last spring and a tight supply of lower-priced homes for sale.
The Federal Reserve has cited the slow pace of the housing recovery as a risk for the broader economy’s continued improvement. In a USA TODAY survey of leading economists this month, 54% said they were more pessimistic about housing’s recovery than they were in December.
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