New Home Sales: Slower April But Strong 1Q Revisions

May 23, 2019
Bottom Line: New homes sales were lower in April, mostly as expected, but there were strong upward revisions to March sales, suggesting the 1st Quarter ended even stronger than previously reported. The composition of sales across home sizes has been volatile with median home prices jumping sharply in April as a greater percentage of higher-end homes were sold, reversing a trend towards lower-end homes in the first quarter. Overall, while new home sales have been volatile, the trend has stabilized after the slowdown in the 2nd Half of 2018 and even shows some signs of a rebound, more encouraging than what we've seen in the existing home sales data so far. New Home Sales FELL by 6.9% to 673k, after the prior month was revised lower to 562k. This compared with market expectations for an increase to 675k, from the unrevised March level of 607k. Sales are now 7.0% ABOVE their year ago level, -- but they are still 51.5% BELOW their July 2005 peak. The Inventory of Homes Available for Sale FELL by 0.9% to 332k. Inventories are now 11.0% ABOVE their year ago level but still 42.0% BELOW their July 2006 peak level. Combined with the decline in sales, the Months' Supply increased to 5.9 months from 5.6 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 8.8% ABOVE their year ago level and with average prices 2.2% ABOVE their year ago level.