New Home Sales: Lower Than Expected With Negative Revisions

Bottom Line: The sharp rebound initially reported for new home sales in March was revised lower as the The Census Bureau and HUD also reported slower than expected sales for April. Still, the trend in sales remains modestly higher with the last 3- and 6-months averaging 664k units per month, stronger than the 12-month average of 632k and the tally for 2017 of 617k. Supply remains relatively tight with home prices accelerating modestly higher. Overall, while this report dashes hopes for any Spring acceleration in new home sales, the trend remains steadily higher. New Home Sales FELL by 1.5% to 662k, after the prior month was revised lower to 672k. This compared with market expectations for a decline to 680k, from the unrevised March level of 694k. Sales are now 12.2% ABOVE their year ago level, -- but they are still 52.3% BELOW their July 2005 peak. The Inventory of Homes Available for Sale ROSE by 0.7% to 300k. Inventories are now 12.8% ABOVE their year ago level but still 47.6% BELOW their July 2006 peak level. Combined with the decline in sales, the Months' Supply increased to 5.4 months from 5.3 months. This is modestly BELOW a normal level of 6.0 months and well BELOW its peak of 12.2 in January 2009. Home Prices ROSE with median prices 0.4% ABOVE their year ago level and with average prices 11.3% ABOVE their year ago level.