U.S. New Home Sales Surge 13.5% in April While Existing Market Stalls
The U.S. Census Bureau and Department of Housing and Urban Development reported new home sales jumped 13.5% in April to 743,000 units annually. This surge exceeded all forecasts and marked the strongest performance since February 2022.
The median price reached $407,200, showing builders maintained pricing power despite market challenges. New home inventory dropped slightly to 504,000 units, representing an 8.1-month supply at current sales rates.
Meanwhile, existing home sales declined 0.5% to 4.00 million units, hitting the slowest April pace since 2009. The National Association of Realtors data revealed a stark contrast between market segments.
Existing home prices climbed to $414,000, setting an April record for the 22nd consecutive month of increases. However, inventory surged 9% monthly and 20.8% yearly to 1.45 million units.
The divergence reflects different market dynamics. Builders offer incentives like mortgage rate buydowns and price cuts to attract buyers. Thirty-four percent of builders reduced prices in May, the highest share since December 2023.
Existing homeowners remain reluctant to sell, creating supply constraints. Many locked in mortgage rates below 3% during the pandemic and resist trading up to current rates near 7%.
Regional performance varied significantly. The Midwest led new home gains with a 35.5% increase, while existing sales fell in most regions except the Midwest.
First-time buyers represented 34% of existing home purchases, up from 32% in March. Cash transactions accounted for 25% of deals, down from previous months.
Housing economists note demand remains at 75% of pre-pandemic levels despite seven million jobs added to the economy. Mortgage rates averaging 6.73% continue constraining affordability for many buyers. The data suggests pent-up demand awaits lower borrowing costs to unlock market activity.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief