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New Home Sales Up an Unexpected 16.2% in April
Sales of new single-family homes increased a surprising 16.2% in April to a seasonally adjusted annual rate of 981,000 units, according to figures released by the U.S. Commerce Department on May 24, leaving the month’s sales pace 10.6% below the rate of a year earlier.
The increase followed a downward revision to the previous month’s sales rate, and April was the fourth consecutive month in which sales were below an annual pace of 1 million units.
"Builders are pulling out all the stops to work down heavy inventories in the face of weak demand that's been exacerbated by the subprime-related tightening of mortgage credit conditions," said NAHB President Brian Catalde. "Our surveys show that the majority of builders are cutting prices and offering substantial non-price sales incentives, and their efforts are bearing fruit."
"We are also seeing buyers gravitate toward lower-priced homes to counter their affordability problems," Catalde said.
"We're viewing the large jump in new-home sales for April with a lot of caution, in view of the large month-to-month volatility historically displayed by these statistics," said NAHB Chief Economist David Seiders. "In addition, the April bulge may very well have reflected favorable weather swings, particularly in the South."
"The first quarter may well have marked the low point for sales volume in the dramatic housing correction that began in the latter part of 2005. We are currently looking for a gradual recovery process going forward, at least on a quarterly basis," Seiders said.
The inventory of new homes for sale edged down in April to 538,000 units, equivalent to a 6.5 months' supply at the April sales pace and down from 8.1 months in March.
Completed homes for sale comprised 33% of the inventory, units still under construction represented 51% of the inventory and units for-sale that were permitted but not yet started were almost 16%. Completed homes were on the market for a median of six months in April.
Regionally, April’s new-home sales were up 27.8% in the South, 3.8% in the Northeast and 8.5% in the West. Sales were down by 4% in the Midwest.
Discussions From
 Construction Forecast Conference Now Available on the Internet
The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months.
Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections.
To Purchase the Webcast
To purchase the Webcast, visit www.nahb.org/cfcwebcast.
 Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
 NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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