Sales of new homes remained stable in April at a seasonally adjusted pace of 352,000 units, according to data released today by the U.S. Census Bureau.
Compared to March, that represents a 0.3% uptick in sales activity. Analysts, however, had expected a slightly better performance in April, given strong first-time buyer activity and reports of increased buyer traffic.
But new homes continue to encounter stiff opposition from existing homes, particularly bargain-priced foreclosures. Sales for existing homes rose 2.9% in April, according to information released this week by the National Association of Realtors (NAR).
“We believe the core problem facing the housing market is still the highly elevated level of existing homes available for sale,” reiterated Michael Rehaut, a housing analyst for J.P. Morgan. He called the April new-home sales pace, which is 34% below what it was a year ago, “highly depressed.” As such, “we continue to believe the spring selling season remains relatively weak, and that a trough in the housing market remains elusive,” he said.
The numbers appear to agree. The supply of new homes for sale in April remained high—10.1 months—given the relatively slow sale pace, even though the actual inventory figure (297,000 homes) is relatively low.
In terms of pricing, which is expected to be under continued pressure from distressed assets (nearly half of April’s existing home purchases, according to the NAR), the median price for new homes sold was $209,700.
Alison Rice is senior editor, online, at BUILDER magazine.