Sales of new single-family homes in the United States fell from a near 12-year high, in April, as prices bounced back and manufacturing dropped to its lowest level in nearly a decade, this May. This suggests quite a dramatic slowdown in overall economic growth has already begun.
The United States Department of Commerce intimates that new home sales dropped nearly 7 percent, to a seasonally adjusted annual rate of 673,000 units in April. This is down from the 723,000 units sold in March; a number that was the highest level since October of 2007. This makes the first decline after three straight months of increases.
Indeed, sales fell in the South as well as both the West and the Midwest. As a matter of fact, the only region that managed to see any increase was the Northeast. It might be a good idea to note that new home sales accounts for about 11.5 percent of total US housing market sales. Analysts estimate these sales would decrease 2.8 percent, to a pace of 675,000 units in April; still sales are up 7 percent from one year ago.
In addition to this, the median price for a new home jumped nearly 9 percent from last year, to $342,200, in April. This is the highest level for this metric since December of 2017. New home prices mostly fell, this year, as the result of builders putting more affordable homes on the housing market. Thus, last month’s drop in sales was most concentrated in the segment of the market occupied by homes valued at less than $300,000.
The main issue at hand, though, is that lower prices hit the market earlier this year and mortgage rates are slipping. This helped the housing market for a time, but a tightening of supplies has brutally damaged sales of previously-owned homes.
Overall, the US housing market has had a bit of a rough year. As a matter of fact, the housing market has been shrinking for the past five quarters, straight. Unfortunately, analysts suggest that another decline is on the way for the second quarter since weak sales has already cut broker commissions.