New home sales fell 5.9% in April from March, and March data was also revised sharply lower, according to the U.S. Department of Commerce. The median new home price jumped 20.1% year-over-year. Nationwide, the S&P Shiller Home Price Index rose 13.2% in March, the largest gain since December 2005, data released the same day showed.
U.S. new home sales in April came in at an annualized 863,000 after quarterly adjustments, down 5.9% from March but up 48.3% compared to the same month last year. U.S. new home sales data in March suffered a sharp downward revision from the previously reported 1.021 million to 917,000, and the month-over-month increase was also revised down sharply from 20.7% to 7.4%.
By region, new home sales in the Northeast, Midwest and South fell by 8.2% to 13.7% in March, while the West saw a 7.9% increase from a year earlier.
While new home sales declined, inventories rose compared to March. From 304,000 in March, it rose to 316,000 in April. At the current rate of sales, it will take 4.4 months for the market to digest the current inventory of new homes, still below the accepted equilibrium indicator of 6 months, but higher than the revised 4 months in March. It is worth noting that the inventory-to-sales ratio has remained below the equilibrium line for 11 consecutive months since it fell from 6.6 months in April last year to 5.3 months in May last year.
Also according to the statistics, the median price of new homes for sale was $372,400, a 20.1% jump year-over-year. Financial blog ZeroHedge pointed out after the data was released that the jump in construction material costs led to higher new home prices, which was a negative factor for the otherwise strong residential market. As a comparison, the previously released sales price of a completed home reached $341,600, up 19.1% year-over-year, with both figures once again hitting record highs.
There is now a clear divergence between the confidence of U.S. homebuyers and builders, with builder confidence near an all-time high and homebuyer confidence near an all-time low.
Data released last week showed that quarterly annualized home sales in April were 5.85 million units, a sharp increase of 33% compared to the same period last year, but a decline of 2.66% compared to March, which was the third consecutive month of decline, while also hitting a ten-month low, and sales figures were also below market expectations. The supply of homes for sale at the end of April was 1.16 million units, up about 10% from the previous month and down 20.5% from last year, and it will take 2.4 months to digest the above inventory at the current sales pace, which is slightly slower than the 2.1 months in March, but still fast compared to the 4 months a year ago. In addition, the pace of home sales continued to accelerate, with an average of 17 days from listing to sale and 88% of homes sold in April listed on the market for less than a month.
The S&P/CS quarterly home price index for 20 large cities rose 1.6% in March, compared with an expected 1.3% increase in February and a 13.27% year-over-year increase in March, compared with an expected 12.5% increase in February and an 11.94% increase in February, the largest increase since December 2013. The increase was the largest since December 2013. Nationally, the S&P CoreLogic Case-Shiller Home Price Index rose 13.2 percent in March, the largest gain since December 2005, compared with a 12 percent increase in February.
Housing prices have been soaring over the past year as Americans have been seeking to purchase real estate in the suburbs. Low mortgage rates have fueled a hot real estate market, and a shortage of housing has helped push up prices.
Recently, Nobel Laureate Shiller said that looking back over the past 100 years, home prices have never been higher. As co-founder of the S & P CoreLogic Case-Shiller Home Price Index, Shiller does not believe that such high prices can be explained by central bank watering, and he believes that there must be some kind of profound change in the market behind it. Over the past three decades, Shiller’s research has found that home prices appear to be a bellwether index for housing starts. He believes that this correspondence is now re-emerging, that there is currently a lot of upward momentum in home prices, and that don’t expect to see a collapse in home prices for another year. But Shiller also believes that the current house price trend is reminiscent of 2003, when the housing boom lasted but 2 years, followed by house prices going through highs and falling very slowly, but finally plummeting in 2008 during the financial crisis.
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