The U.S. Census Bureau and the Department of HUD released the new homes data today. New one-family home sales were at a seasonally adjusted annual rate of 526,000 for April 2008. This is up 3.3% from the revised March rate of 509,000, but is 42.0% below April 2007. March 2008 was revised from 526,000 to 509,000. Economists had forecast a level of 520,000 for April 2008.
Months Supply improved from 11.1 in March to 10.6 in April. However this is still at an elevated level for inventory. Over 6 months supply puts a downward pressure to home prices as supply exceeds demand. As discussed in this post, the amount of new home completions is now around the level of new home sales. However, there is still a huge amount of excess inventory to work through.
March through June is usually the strongest months for New Home Sales. Using 2001 and 2005 for comparisons, sales for April are at 56.0% of 2001’s pace and only 40.5% of the pace during the boom year of 2005. Sales continue to be anemic.
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