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Housing Recovery Appears to Strengthen
May 26—Three new reports this week suggest a strengthening recovery in the U.S. housing market, even as important negative factors persist.
Most encouraging was today's U.S. Census Bureau report showing a strong surge in new home sales in April.
The surge took analysts by surprise.
- Sales were up 14.8%, well ahead of expectations, said the website of Econoday, market and financial analysts.
- The Census Bureau revised March and April figures upward by a combined 42,000 units.
- Supply dropped 7% to its lowest level in nearly 42 years, said Econoday.
- Supply at the current rate fell to 5 months vs. 6.2 months in March.
- On the negative side of the ledger, new home prices continued to decline. April prices were off by 9.7%, to a median $198,400, the lowest since 2003.
Existing home sales in April also jumped, according to the National Association of Realtors.
- Existing home sales rose 7.6% in April
- Market supply, however, also increased (11.5%) to 8.4 months.
Stronger sales of both new and existing homes were driven by the second-round of buyer tax credits from the federal government.
- The national median price paid for existing homes in April was $173,100, up 4% from April 2009.
- Distressed homes accounted for 33% of April sales, down from 35% in March.
The Standard & Poor's Case-Shiller Home Price Index for March confirmed weakness in home prices.
- The index price fell 3.2% in the first quarter.
- However, it remains well about the level of a year earlier.
- The record low decline in prices was in the first quarter of 2009.
- Index home prices are currently at a comparable level to spring, 2003.
Read the full U.S. Census Bureau news release.
Read the complete NAR news release.
View an NAR video press conference on the April release.
Read the complete S&P/Case-Shiller news release.
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