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Despite decline in April, new-home sales remain strong
New home sales dipped 5.9 percent from March's downwardly revised rate of 917,000 annu
alized units to 863,000 units in April. Sales were up 51.4 percent versus April 2020, according to data in a new Macro Data Flash report.
“Year-over-year numbers were still strong, but the next few months will be skewed by the COVID-19 lockdowns last year," said NAFCU’s chief economist and vice president of research, Curt Long. "The bright side of slowing sales is that the inventory-to-sales ratio is rising and nearing its highest point in a year. However, construction snags are slowing the progress. Homebuilders continue to struggle with a myriad of supply, labor, and cost issues.
"The increase in lumber prices, for instance, is adding $36,000 to the price of a new home. The construction backlog is mounting as the share of sales under construction rose to 42 percent, its highest level since 1999," Long added.
Sales rose in two regions in April, with the South rising 7.9 percent, followed by the West at 3.9 percent. The Northeast fell 13.7 percent while the Midwest dropped 8.3 percent.
Based on current month sales, there were 4.4 months of supply in April, up 0.4 months from March. The number of unsold homes left on the market was up to 316,000 units on the month. This represents a 1.6 percent reduction from year-ago inventory levels. The median new home price, non-seasonally adjusted, rose from $334,200 in March to $372,400 in April. April's prices are up 20.1 percent from a year ago.
“NAFCU expects new home sales to remain strong, but to be held back by supply and price issues that will take more time to unwind," Long concluded.