Sales of new homes near 5-year high
“We’re now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward.”
Better job prospects and low mortgage rates are propelling the housing market’s recovery.
Still, a normal level of sales would register at about 700,000 pace.
The median sales price rose sharply by 8.3 percent in April to $271,600, the highest level in 20 years.
A lack of inventory is helping push up prices.
The National Association of Realtors said on Wednesday that new-home building is needed to fill the gap of demand that isn’t being met by the low supply of previously occupied homes on the market.
Sales of existing homes hit the highest level since November 2009.
So builders are picking up the pace of construction. They requested the most building permits, a forward looking indicator of future construction, in nearly five years.
The supply of new homes for sale increased 3.3 percent in April is a still-thin 156,000, the most in 18 months, and only a 4.1-month supply.
But that still only registers slightly above the record low of 142,000 set in July.
Regionally, sales rose 3 percent in the South and 10.8 percent in the West, but fell 4.8 percent in the Midwest and 16.7 percent in the Northeast in April.
“Builders are reporting an active spring buying season as consumers become more confident about going forward with a new-home purchase along with steadily firming prices in local markets,” said Rick Judson, chairman of the NAHB and a home builder from Charlotte, N.C.
“While the cost of constructing homes is rising due to tightened supplies of materials, lots and labor, to some extent, this may be creating greater urgency among potential buyers.”
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