The Low Post News

Single-Family Home Sales Jump in April

Sales of new single-family homes were up 6.4% during April from the previous month. That moved the seasonally adjusted yearly rate to 433,000 said the Department of Commerce on Friday.

Economists had been expecting sales for the month to reach a pace of 420,000 for the year. The report had given another sign the housing market might be coming out of its weakness that has grabbed it for months.

One economist said that buyers have been gradually getting off the fence and opting to purchase, while another said she was cautiously optimistic, as she believes things will get even better.

It was not just new home buyers that helped the housing market in April. Sales of home that were previously owned, the largest part of the housing market, increased by 1.3% during April over March’s figures, said the Association of National Realtors.

Last week, the Department of Commerce announced that housing starts had soared during April by 13.2%.
Although the new homes data for sales was cheered on Friday by Wall Street as the S&P 500 index reached a new record high, it remains unclear if this represents an anomaly of one month or a trend moving forward.
In addition, sales of new homes, based on signed contracts are revised sharply quite often.

The U.S. housing market took a cool down last summer and through the winter following a strong recovery during the first six months of 2013. As interest rates on mortgages and prices increased, would be purchasers struggled in deciding if they could afford a new home.

In addition, severe weather that hit much of the country depressed sales further during the winter. That slowdown ended up tempering the outlook for the most recent spring season and put a damper on the hopes that the market would help super charge a larger recovery in the economy.

However, a turnaround could be on the way. The country during April added over 288,000 jobs, the most in over two years. The quantity of homes on sale has risen and the rates for mortgages are stabilizing.

This week rates dropped with the average 30-year fixed rate mortgage dropping to 4.14%, which is the lowest it has been since October of 2013.

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