Data released today showed a bigger-than-expected decline in new home sales during April in the US. Analysts at Wells Fargo point out that sales are up 7% from a year ago helped by lower mortgage rates.
“New home sales fell 6.9% from the upwardly revised 723,000- unit pace in March. However, sales are up 7.0% on a year-ago basis, and April’s drop marks the first monthly decline of 2019. More favorable buying conditions alongside lower mortgage rates this year have breathed some life back into home sales.”
“A shortage of more affordable homes likely played a role in the monthly drop, as sales of homes priced below $300,000 fell during April. Meanwhile, sales of homes priced above $300,000 increased during the month. Builder discounting of higher priced homes to clear rising inventories was likely a factor, which also had the effect of boosting the median price 8.8% year-over-year to $342,200. Months’ supply at the current sales pace rose to 5.9.”