Despite decline in April, new-home sales remain strong

by NAFCU Newsroom

New home sales dipped 5.9 percent from March’s downwardly revised rate of 917,000 annualized units to 863,000 units in April. Sales were up 51.4 percent versus April 2020, according to data in a new Macro Data Flash report.

“Year-over-year numbers were still strong, but the next few months will be skewed by the COVID-19 lockdowns last year,” said NAFCU’s chief economist and vice president of research, Curt Long. “The bright side of slowing sales is that the inventory-to-sales ratio is rising and nearing its highest point in a year. However, construction snags are slowing the progress. Homebuilders continue to struggle with a myriad of supply, labor, and cost issues.

“The increase in lumber prices, for instance, is adding $36,000 to the price of a new home. The construction backlog is mounting as the share of sales under construction rose to 42 percent, its highest level since 1999,” Long added.

Sales rose in two regions in April, with the South rising 7.9 percent, followed by the West at 3.9 percent. The Northeast fell 13.7 percent while the Midwest dropped 8.3 percent.

 

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