By Sharon Nunn and Harriet Torry
WASHINGTON--New home sales in the U.S. declined in April, posting the largest monthly drop since the end of last year and signaling the housing market is on weaker footing during the key spring selling season.
Purchases of newly built single-family homes--a relatively narrow slice of all U.S. home sales--declined 6.9% to a seasonally adjusted annual rate of 673,000 in April, the Commerce Department said Thursday. This was the largest month-on-month drop since December of last year. Economists polled by The Wall Street Journal had expected a 2.7% drop.
New-home sales declined in all regions but the northeast, with purchases in the midwest and west notching the biggest monthly drops since December 2018 too.
Still, the report offered positive signs for the housing market. The department revised up its estimate of overall new-home sales in March, and sales grew robustly in February and January. Meanwhile, sales were up 7% in April from the prior year. Still, the rate of new-home sales is well below levels clocked before the last recession.
The months' supply of new homes for sale on the market was 5.9 in April, up from 5.7 a year ago. The median sales price of a new home in April was $342,200, up from $314,400 last year.
The broader housing market has faltered for more than a year because rapidly increasing prices, higher mortgage rates and a shortage of inventory that have kept many potential buyers out of the market. Sales of previously-owned homes, which make up the bulk of housing market activity, continued to fall in April, according to the National Association of Realtors.
Meanwhile, a separate Commerce Department report showed home building across the U.S. increased last month, driven by an uptick in single-family construction across most of the country.
Write to Sharon Nunn at firstname.lastname@example.org and Harriet Torry at email@example.com.
(END) Dow Jones Newswires
May 23, 2019 10:15 ET (14:15 GMT)
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