New home sales hit a five month high in April matching the previous five-month high in March. The Census Bureau and the Department of Housing and Urban Development released data on home sales Thursday. In addition, the median sales price rose sharply by 8.3% in April to $271,600, the highest level in 20 years. Sales were up in the South and West but fell in the Midwest and Northeast
In April 454,000 new homes were sold which is 2.3% higher than the revised March total of 444,000 homes sold. The average sales price of a new home was $330,800. Prices rose because inventories are low. There are only 156,000 unsold new homes or a 4 month supply. Increased sales and rising prices are likely to spur an increase in home building this summer. Last month permits were up.
“Today’s report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year,” Robert Denk, senior economist with the National Association of Home Builders (NAHB) told The Hill.
“We’re now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward,” he added
Existing home sale up also
Existing home sales also rose in April according to a release from the national Association of Realtors (NAR). Completed transactions including single-family homes, town homes, condominiums and co-ops, increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million in April from an upwardly revised 4.94 million in March. Resale activity is 9.7 percent above the 4.53 million-unit level in April 2012.
Lawrence Yun, the chief economist of NAR said the market is solidly recovering. “The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5-million unit pace,” he said.
“Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction,”he added.
Existing-home sales are at the highest pace since November 2009 when the market spiked to 5.44 million in response to the home buyer tax credit. Total sales have been above year-ago levels for 22 consecutive months, while prices show 14 consecutive months of year-over-year price increases according to the NAR.
The inventory of existing homes rose slightly in April over March but is less than a year ago. Total housing inventory at the end of April rose 11.9 %, a seasonal increase to 2.16 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, compared with 4.7 months in March. Listed inventory is 13.6% below a year ago, when there was a 6.6-month supply, with current availability tighter in the lower price ranges.
Distressed homes – foreclosures and short sales – accounted for 18 percent of April sales, down from 21 percent in March and 28 percent in April 2012.
The news is good for the housing industry which was hit hard in the recession. Interest rates are low and the economy is improving so the summer of 2013 might see recovery of the housing industry continue. Increased home sales prices mean homeowners are recovering the equity they lost and this will likely boost consumer sales. So things are looking up.
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