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Housing Recovery Appears to Strengthen
May 26Three 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.
Existing home sales in April also jumped, according to the National Association of Realtors.
- 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.
Stronger sales of both new and existing homes were driven by the second-round of buyer tax credits from the federal government.
- Existing home sales rose 7.6% in April
- Market supply, however, also increased (11.5%) to 8.4 months.
The Standard & Poor's Case-Shiller Home Price Index for March confirmed weakness in home prices.
- 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.
Read the full U.S. Census Bureau news release.
- 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 complete NAR news release.
View an NAR video press conference on the April release.
Read the complete S&P/Case-Shiller news release.