US new-home sales rose 6.4 percent in April

Published on NewsOK Modified: May 23, 2014 at 1:44 pm •  Published: May 23, 2014
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WASHINGTON (AP) — Sales of U.S. new homes recovered in April after slumping in the previous two months. But Americans are still buying new homes at a slower pace than they did a year ago.

The Commerce Department said Friday that sales of new homes rose 6.4 percent last month to a seasonally adjusted annual rate of 433,000. That compares with an upwardly revised annual pace of 407,000 in March, when purchases fell 6.9 percent. Buying had dropped 4.4 percent in February, in part because of winter snowstorms.

Demand for newly built homes remains one of the missing pieces of the nearly 5-year-old recovery from the Great Recession. A lack of affordability has limited buying around the country. Sales of new homes are running at roughly half the rate of a healthy real estate market.

Warmer weather has yet to heat up the housing market after a harsh winter slowed sales in January and February. Higher prices and mortgage rates over the past year have sidelined many would-be buyers.

Sales during April surged in the Midwest and edged up in the South. Home-buying was flat in the West and fell in the Northeast.

Yelena Shulyatyeva, an economist at BNP Paribas, noted that the 47.4 percent increase in Midwest sales likely came from the start of the spring buying season and that similar levels of growth are "not likely to continue."

"The broader trend remains one of weak underlying demand," Shulyatyeva said in a client note.

New-home sales have declined 4.2 percent over the past 12 months.

The median sales price, which can be volatile, fell a slight 2.1 percent during the past month to $275,800.

Buying has been slow across much of the country after climbing in the first half of 2013. Last year's gains and a limited supply of homes pushed up prices to levels that strained household budgets for potential buyers.