Steel Markets

April New Home Sales up 16.6% From March

May 23, 2016

Sales of new single-family houses in April surged 16.6 percent from March to a seasonally adjusted annual rate of 619,000, according to estimates released by the Commerce Department. The increase in percentage was the highest since January 1992 and the highest annual rate since 2008. Sales were up 23.8 percent from the April 2015. March sales were revised to 531,000 units from the previously reported level of 511,000.

“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season,” said NAHB Chairman Ed Brady.

“Rising home sales combined with tight inventory will translate into increased housing production as we move onward in 2016, especially as job creation continues and mortgage rates remain low,” said NAHB Chief Economist Robert Dietz.

Monthly housing numbers are prone to volatility and frequently revised, prompting economists to warn against reading too much into April’s gain.

“In fact, the numbers are probably too good to be true, as I would be surprised if we continue higher from here,” wrote Stephen Stanley, chief economist for Amherst Pierpont Securities, as quoted by MarketWatch. “Nonetheless, even if there is a bit of a pullback in May or June, the trend is undoubtedly upward and will almost certainly remain so.”

The median sales price of new houses sold in April 2016 was $321,100; the average sales price was $379,800. Supply of new homes tightened in April to 243,000; at the current sales rate the supply stands at 4.7 months, down from 5.5 months in March.

The Northeast saw a 52.8 percent jump in sales from March to April. The South and West showed gains of 15.8 percent and 18.8 percent, respectively. Sales in the Midwest slowed after a March increase, falling 4.8 percent to 60,000 from 63,000.