US new home sales miss expectations in April

us new home sales miss expectations in april

Sales of new US homes edged down in April, according to government data, while analysts warn of weakness ahead. Photo: Jim WATSON / AFP/File Source: AFP

Sales of new US homes were weaker than analysts expected in April, government data showed Thursday, with slower mortgage demand appearing to bog down the number of transactions.

New single-family home sales came in at an annual rate of 634,000 last month, seasonally adjusted, down 4.7 percent from March's 665,000 rate, said the Commerce Department.

The figure for March was revised lower, while April's numbers were below a Briefing.com consensus forecast of 680,000.

Home sales have taken a hit since the Federal Reserve raised the benchmark lending rate rapidly in 2022 to curb surging inflation.

But significantly higher mortgage rates have also made homeowners reluctant to sell their properties, leading to tighter supply and pushing buyers into the market for new construction.

While a 30-year fixed-rate US mortgage averaged around three percent in May 2021, the average rate as of May 16 was around 7.0 percent.

This has given the new homes market a boost in past months.

Compared with the same period a year ago, however, sales of new homes were 7.7 percent lower in April.

The median sales price was $433,500, slightly lower than in March, the Commerce Department said.

While sales data can be volatile and revised later, the April selling pace was lower than the first quarter average of 653,000, noted Rubeela Farooqi, chief US economist at High Frequency Economics.

"The new home sales report completes a trifecta of bad news in housing this week," said economist Robert Frick of the Navy Federal Credit Union.

"Building is anemic, existing home sales missed estimates and now new home sales had a big drop and remain tepid overall," he added in a statement.

While lower interest rates will support builders and buyers, this is "especially because we need robust building to make up for weak construction in the 2010s," Frick said.

Economist Oliver Allen of Pantheon Macroeconomics expects mortgage rates to decline in the coming quarters, "partly in response to a softening labor market."

"That would be a mixed blessing for home sales since it would reduce the pool of potential homebuyers," he said.

Unlock the best of TUKO.co.ke on Pinterest! Subscribe now and get your daily inspiration!

OTHER NEWS

6 hrs ago

‘The time of the whole car city is over’: How is Paris encouraging walking and cycling?

6 hrs ago

Chinese premier in Australia promises replacement pandas

6 hrs ago

UN peacekeepers deployed in DRC to counter new wave of violence

6 hrs ago

2026 World Cup And NFF’s Approach To Rescue S’Eagles

6 hrs ago

'What a game.' UK baseball reflects on winning College World Series opener

6 hrs ago

Your Full Guide to Disposable Vapes

6 hrs ago

Czech Delegation Seeks Investment From Taiwan's Chip Suppliers - TaiwanPlus News

7 hrs ago

Copa America 2024: I don’t agree with Ronaldinho’s statement – Raphinha

7 hrs ago

Malaysia pins its belt and road infrastructure hopes on deepening China ties

7 hrs ago

Australia’s tighter immigration policy poses risk to luxury home market

7 hrs ago

Meet Park Chan-am: leading South Korea’s defense against North Korean cyber attacks

7 hrs ago

Ethiopia Can Balance Electric Power Interconnection of Region: APRA Secretariat Head

7 hrs ago

Messi names best goalkeeper in the world

8 hrs ago

TSMC Eyes Europe With Shares at Record High - TaiwanPlus News

9 hrs ago

DeChambeau a one-man show at Pinehurst No. 2 and leads US Open by 3

9 hrs ago

‘Beyoncé stepped out of her comfort zone to collaborate with me’ – Sean Paul

10 hrs ago

Brazil: Thousands protest bill tightening abortion ban

10 hrs ago

If You'd Invested $10,000 in Chipotle Mexican Grill Stock 5 Years Ago, Here's How Much You'd Have Today

10 hrs ago

Six Trooping the Colour pictures that caught the eye

10 hrs ago

Italy begin Euro 2024 title defense with win as Spain start in style

10 hrs ago

Three swimmers in China doping scandal failed earlier tests: report

10 hrs ago

Le Mans 24h, H12: Porsche battles against Toyota at the halfway point

10 hrs ago

Switzerland thrash Hungary in Euro 2024

10 hrs ago

Cantlay has another steady round to stay within reach of 1st major title at US Open

10 hrs ago

Rise in badly-behaved tourists prompts Indonesia visa reassessment

10 hrs ago

Flag/ Fan Friday RWANDA! (Geography Now!)

10 hrs ago

Mistakes Everyone Makes When Ordering Food From Subway

10 hrs ago

Golden Brown Pizza Dough

10 hrs ago

5 Services the Middle Class Won’t Be Able To Afford in the Next 5 Years

11 hrs ago

PM Extends Eid al-Adha Best Wishes to Ethiopian Muslims

11 hrs ago

Germany: EURO 2024 opens with Germany's commanding win, Scottish fans celebrate spirit despite defeat

11 hrs ago

Le Mans-leading Ferrari hit with big penalty for BMW crash

11 hrs ago

Hosts Germany thump Scotland in Euro 2024 opening match

11 hrs ago

Are animals conscious? How new research is changing minds

11 hrs ago

Warnings over Guatemala's volcano tourist hotspot

11 hrs ago

I'm Retired. Do I Need to Worry About My Credit Score?

11 hrs ago

Hyundai Motor’s India arm aims for historic IPO, eyes $3B raise

12 hrs ago

Which Are the Tallest Mountains in the World? See Costs of Climbing Them

12 hrs ago

Kate returns to public events at Trooping the Colour

12 hrs ago

China’s Belt and Road Initiative a plus, the rest so-so on Hong Kong-Chiang Mai journey