New-homes sales were up in April with a 3.3% gain over March’s figure and were 8.5% higher year-over-year for a seasonally adjusted annual rate of 343,000, according to data released today by the Department of Commerce. The improvement surpassed consensus expectations, which had pegged April’s number at 335,000.
More good news came by way of revisions to January, February, and March’s estimates, all of which were moved up. Once those changes are brought into account, a three-month moving average shows sales up by 40,000 units in the six months ended in April, according to data from IHS Global Insight.
Median price inched higher with a 0.7% gain to $235,700—up 4.9% on an annual basis.
Total inventory also moved up for the month, gaining 1.4%, although "actual finished speculative units available for sale are at all time lows," wrote Adam Rudiger, senior analyst at Wells Fargo, in an analysis he provided to Builder. Rudiger was encouraged by the uptick in inventory, interpreting it to mean that "builders are becoming more comfortable adding some additional spec units in the face of a strong spring selling season and a relatively low months’ supply." He also pointed to a shift toward more purchases of pre-ordered homes: Sales of not-yet-started homes made up 30% of sales in April, compared to 23% a year ago; completed homes sold stood at 39% of sales, compared to 50% a year ago.
However, the fact remains that, improved though it may be, the new-home sales rate continues to stand at only half of what is considered healthy, and while Rudiger does foresee improvement, "based on non-seasonally adjusted (actual sales) year to date, and more-normal seasonality, new-home sales are on track to grow by just 8% to 10% in 2012," he wrote.
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.