Sales of new US homes cooled in April from an 11-year high amid a surge in prices, adding to signs of softness in housing at the start of the quarter.
Single-family home sales fell 6.9 percent to a 673,000 annualised pace, close to economist estimates following an upwardly revised March reading of 723,000, government data showed. The median sales price increased 8.8 percent from a year earlier to $342,200, the highest since December 2017.
Roughly the entire sales decline came in homes priced below $300,000, suggesting a shortage of affordable properties is hamp- ering buyers and the effects of this year’s drop in mortgage rates are waning.
Such difficulties indicate residential investment may continue to be a drag on the economy despite steady job and wage gains. While revisions indicate demand for new homes has been overall stronger than previously reported in 2019, the latest data add to a mixed picture of US housing.
Existing-home sales, which make up most of the market, unexpectedly dropped in April, while housing starts rose for a second month and single-family home permits declined. The number of properties sold for which construction hadn’t yet started rose to the highest since 2017, a positive sign of demand. But the number of completed homes on the market increased to the
most since 2010. New-home purchases account for about 10 percent of the market and are calculated when contracts are signed.
They are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close.