New home sales
The new home sector has been hit extremely hard by the recession but the U.S. Commerce Department’s April data is finally good news after consistently negative reports on all fronts for many months.
Sales of new single family homes rose 7.3% in April which is the best pace in five months. All regions rose in April led by the West which is up 15.1% in sales, up 7.7% in the Northeaste, up 4.9% in the Midwest, and 4.3% in the South.
Sales, permits and inventory have hit historically bad levels in the past year yet this report shows the national inventory fell 2.8% to a new record low, indicating that the silver lining in the struggling sector is difficulty obtaining financing meaning no overbuilding.
NAHB welcomes the news
“The fact that new-home sales have now risen for two consecutive months is certainly welcome news following an all-time low sales number in February,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “That said, builders are still contending with a great deal of competition from foreclosed properties for sale in certain markets, and in places where this is not an issue, it remains extremely difficult to obtain credit to build new homes.”
“While more buyers are starting to show up at builder sales offices this season, the level of actual buying activity remains quite low,” said NAHB Chief Economist David Crowe. “The razor-thin inventory of new homes for sale is indicative of the caution that builders are exercising with regard to new projects as well as their inability to obtain financing for new-home production.”
Joe Loomer
May 25, 2011 at 5:16 am
While new homes inventory has remained static around the 800 mark in our area, their portion of sales has increased sharply – drastically impacting owner-occupied (non-distressed) resales – which now only account for 40% of sales in the Greater Augusta-area. Good for the builders, but bad for re-sellers.
Navy Chief, Navy Pride
Dan Boyle
May 25, 2011 at 2:07 pm
I'm seeing all kinds of evidence that the bottom is solidifying. Here's a little more. Me likes it.
MH for Movoto
May 25, 2011 at 4:25 pm
Good stuff, of course. But it's relative.
Lucy
May 27, 2011 at 9:24 am
That's great that they're up 2 months in a row and that it's the highest they've been in 5 months, but isn't April historically higher than the preceding 5 months? Were April sales up year over year?
cha
May 28, 2011 at 9:00 am
A positive sign for the home builders. But we still have a very long way to go for them as they face tough competition from foreclosures.
Kevin Hughes
May 29, 2011 at 5:15 pm
We are experiencing multiple offers in almost every price range now. As distressed properties get cleared out of the inventory- who are our new sellers going to be? Most mom and pop homeowners cannot afford to sell so new construction is likely to be the beneficiary of pent up buyer demand.