US new-home sales drop 11.4% in April, most in 2 years

US new-home sales drop 11.4% in April, most in 2 years

US new-home sales drop 11.4% in April, most in 2 years

The Commerce Department said on Tuesday new home sales declined 11.4 percent to a seasonally adjusted annual rate of 569,00 units last month, with sales in the West region plunging to their lowest level in almost 1-1/2 years.

The median price of a new home was $309,200, down 3.0% from March.

The seasonally adjusted rate of new single-family home sales in the US fell 11.4 percent from March to April to a rate of 569,000 annual sales and is now running a nominal 0.5 percent above the pace of sales at the same time a year ago.

The data have a margin of error of 10.5%, and the overall trend remains one of continuing improvement in the market. The housing market is also being supported by historically low mortgage rates.

New-home construction declined modestly in April for the third time in four months.

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This month's drop in home sales and the stagnation in new home inventory will continue to exacerbate the national inventory shortage which will result in even higher prices and lower affordability.
The PHLX housing index .HGX slipped 0.1 percent, with shares in the nation's largest homebuilder, D.R. Horton DHI.N , falling 0.1 percent.

But last month new-home sales fell in every region, led by a 26.3 percent plunge in the West, the biggest drop there since October 2010.

Existing home sales are expected to dip to an annual rate of 5.68 million in April after jumping to a ten-year high of 5.71 million in March.

Shrinking labor market slack, marked by a 4.4 percent unemployment rate, is improving employment opportunities for young Americans, underpinning demand for housing. A market with a healthy balance between supply and demand has about 6 months' worth of inventory.

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