Photo: Edgar Zuniga Jr.
There was a groundswell of new home sales in the US last month, suggests the latest report from the US Census Bureau.
Single-family sales in April hit a seasonally adjusted annual rate (SAAR) of 619,000, according to estimates from the agency and the Department of Housing and Urban Development.
That sales tally — which represents what sales activity would reach if April’s seasonally adjusted estimate persisted for a year — is the highest level since January 2008, says Trading Economics, which tracks data from 232 countries.
April’s figure represents a 16.6 percent leap over the previous month’s revised activity reading, which pegs sales at a rate of 531,000.
Prices for new homes were also on the rise last month, according to the Census Bureau report’s preliminary data.
The average price of a new home was $379,800 in April, up 7.3 percent from a revised $353,900 in March. The median price during this period increased 7.8 percent to $321,100, having climbed from a revised $297,900 the month before.
As prices and sales activity heats up, supply levels are sinking, estimates contained in the report suggest.
There were 243,000 new homes on the market at the end of April, according to the Census Bureau’s seasonally adjusted estimate.
The agency says this level of supply would sell out in 4.7 months if April’s level of activity persisted.
In March, supply sat at 5.5 months, and April marked the first time since February 2015 that supply has fallen below the five-month mark.
There is speculation of a Fed rate hike in the coming months, which would lead to higher mortgage rates, a possible cooling wind for the housing market.
However, Robert Toll, chairman at Toll Brothers, a major US homebuilder, highlighted during the company’s Q2 earnings conference call how higher rates can have the opposite effect in some pockets.
“If the Fed goes up and mortgage rates go up an eighth or a quarter, that doesn’t mean we shut down,” he said, referring to the upscale Toll Brothers at Hidden Canyon community in California.
“It probably means price increase coming soon, which spurs demand and spurs action. So it’s too early yet to tell, but we could be on to something good,” he adds.