Economy

Home Sales Up 0.6 Pct In April Despite Lockdown

Home Sales

Sales of new single-family homes were up 0.6 percent in April compared to March, but they fell by 6 percent compared to April 2019, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).

The seasonally adjusted number of new houses sold last month totaled 623,000, down from 664,000 in April 2019. As home sales fell, so did prices. The median price for a new home last month slipped 8.6 percent to $309,900. One year ago, the median was $339,000.

Building permits did not fare any better last month, according to HUD. In April, 1 million permits were issued in the U.S. That’s down from 1.3 million, a 19 percent decline from April 2019.

“… there is an undercurrent of long-term positivity in the housing market that will likely allow for a strong rebound,” said Dean Mon, chairman of the National Association of Home Builders (NAHB), in a statement last week. “Our builder confidence index has already shown signs of a turnaround. Housing was showing signs of momentum before the pandemic and is poised to lead the economic recovery as virus mitigation efforts take hold and more states take gradual steps to reopen.”

NAHB’s Chief Economist Robert Dietz said while the April numbers were down, they were somewhat better than forecasted and are expected to improve as the economy reopens.

Single-family weakness was particularly seen in the West and Northeast as larger metro areas were under more economic pressure due to the pandemic lockdown, he said.

“But as a sign of the strength housing had going into this downturn, single-family starts are still 1 percent higher on a year-to-date basis,” Dietz said in a statement.

HUD and the U.S. Census reported from January through April that 241,000 new homes have sold, up from 238,000 in April 2019.

William Banfield, Quicken Loans’ executive vice president of capital markets, said the dip in sales is not surprising given most states were under stay-at-home orders in April, which included home builders.

"While it may seem grim, we know there is light at the end of the tunnel because in May, many states ... began to allow construction,” Banfield said in a statement. “This is reassuring since, with home buying expected to bounce back after the country reopens, it is critical builders generate enough new supply to keep up with strong demand.”

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