New home sales in April were down from the previous month and down from April 2023.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced Thursday that sales of new single‐family houses in April 2024 were at a seasonally adjusted annual rate of 634,000. This is 4.7% below the revised March rate of 665,000 and is 7.7% below the April 2023 estimate of 687,000.
"While higher mortgage rates in April took a toll on new home sales, builders continue to benefit from the lack of resale inventory and from their ability to use incentives such as mortgage rate buydowns to entice buyers off the sidelines," commented First American Deputy Chief Economist Odeta Kushi. "Builders have a huge competitive advantage over the resale market in this way. In the decade preceding the start of the pandemic, new home sales made up approximately 9% of total home sales, today it's more like 13%."
The seasonally‐adjusted estimate of new houses for sale at the end of April was 480,000, which represents a supply of 9.1 months at the current sales rate.
Kushi expects single-family construction to rise this year as a result of the long-term housing shortage, coupled with a lack of existing-home inventory and builders’ ability to offer incentives.
"However," Kushi said, "builders continue to grapple with supply-side challenges and higher-for-longer mortgage rates, which are a major headwind for builders and potential home buyers alike. Despite the challenges, the new-home market will likely continue to outperform the existing-home market over the near term because, unlike existing homeowners, builders are not rate locked-in."
The median sales price of new houses sold in April 2024 was $433,500, while the average sales price was $505,700.
The Census' May report is scheduled for release on June 26.
