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Analysts at Wells Fargo, point out that even with with downward revisions, new home sales are up 8.4% year-to-date. They war that rising cost could limit sales gains.

Key Quotes:

“New home sales declined 1.5 percent to a 662,000-unit annual pace in April as sales in March were revised lower to a 672,000-unit annual pace.”

“Home sales rose solidly in the West earlier this year and likely did not see as much incremental improvement in April as they usually do, resulting in the seasonally-adjusted drop.”

“Stronger job and income growth appear to be driving demand for new homes and sales are off to a solid start this year. Rising mortgage rates and rising home prices will likely put a relatively low ceiling on sales gains this year.”