![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2021\/05\/April-US-new-home-sales.jpg\")
<\/a>Photo: James Bombales<\/em><\/p>\nSurging prices prompted some prospective buyers to press pause on their search for a new single-family home in April, causing sales to drop 5.9 percent on a monthly basis to <\/span>863,000 annualized units, according to the <\/span>US Census Bureau<\/span><\/a>.\u00a0<\/span><\/p>\n In a move that Fannie Mae Chief Economist Doug Duncan called \u201cunanticipated,\u201d March\u2019s sales estimate was revised to 917,000 units, down from 1.02 million units. April\u2019s weakened performance, however, was largely expected due to rising material costs, labor shortages, and a lack of buildable lots for sale.<\/p>\n There were 316,000 new homes on the market in April, the highest level of inventory in a year. This equates to a 4.4-month supply at the current sales rate, a slight improvement over March\u2019s 4.0-month supply.<\/p>\n Although new homes were purchased at the slowest pace since last June (with the exception of <\/span>February\u2019s cold snap-induced slump<\/span><\/a>), compared to the same period last year, sales totals are up about 26 percent. Buyers scooped up a record number of pre-construction homes last month, eager to take advantage of still-low mortgage rates. Sales of to-be-built homes rose 16.5 percent from March and April to \u201cthe highest level since 2006,\u201d noted Duncan.\u00a0<\/span><\/p>\n \u201c<\/span>This growing construction backlog, combined with another strong rise in the median home sales price (up 20.0 percent from a year earlier), suggests to us that demand for new homes remains strong but homebuilders are struggling to keep up,\u201d Duncan added.\u00a0<\/span><\/p>\n The median sales price of a new single-family home jumped 20.1 percent year-over-year to $372,400. High prices for new homes have been attributed to rising material costs, particularly softwood lumber, which increased to $1,200 per thousand board feet in April \u2014 a 110 percent spike over the previous year.<\/p>\n The National Association of Home Builders (NAHB) estimates that costs for the average single-family home have <\/span>gone up by $36,000<\/span><\/a> due to the ongoing lumber shortage, caused by a variety of factors including sawmill closures related to COVID-19 outbreaks and a mountain pine beetle infestation in British Columbia. There are widespread reports of homebuilders delaying construction until lumber prices begin to normalize, something that\u2019s not expected to happen until the fall.\u00a0<\/span><\/p>\n