Washington: US new home sales slowed last month as the tight housing market showed some signs of slackening and prior months were revised down, according to government data published Wednesday.
Supplies of homes for sale increased and the median price fell in April to the lowest level in a year, pointing to a possible dip in demand that could weigh on GDP growth in the second quarter, according to the Commerce Department report.
But there were signs of an uptick in activity at the luxury end of the market, which pushed the average price to the highest level on record.
Total sales of newly constructed single-family houses fell 1.5 percent compared to March to an annual rate of 662,000 units, seasonally adjusted. That undershot economists’ expectations, which called for 677,000.
The sales pace was still nearly 12 percent higher than April of last year, but the sales pace peaked in November at 712,000 in the wake of several natural disasters across the country, and has been trending lower ever since.
Sales in April jumped 11 percent in the West, fell 7.9 percent in the East and were flat everywhere else.
In a further sign of weakness, results for December through March were all revised lower by a cumulative 49,000 units.
– Mortgage rates rising –
Economists cautioned that the volatile sales figures are subject to major revisions from month to month but said rising mortgage rates could depress homebuyers’ appetites.
A Freddie Mac survey also released Wednesday showed 30-year fixed-rate mortgage commitment rates hit 4.6 percent, the highest level in 11 years, as investors drive up bond rates.
“The message from the mortgage applications data now is that sales have peaked for this cycle and will gradually trend down to about 620,000 over the next few months, weighed down by higher mortgage rates and tightening lending standards,” Ian Shepherdson of Pantheon Macroeconomics said in a research note.
Analysts say years of economic recovery and sluggish construction have produced a tight and competitive market for newly-built single-family homes.
But the latest data pointed to a pause in this trend: the inventory of houses for sale rose 0.7 percent to 300,000, seasonally adjusted, moving the supply at the current sales rate up 1.9 percent to 5.4 months.
Meanwhile, the median sales price sank 6.9 percent to $312,000, the lowest level since April of last year.
The average price, however, hit its highest level on record at $407,300, an 11.3 percent increase, marking the biggest jump in almost four years.
Commerce Department officials warn the housing sales figures are highly volatile and it takes about six months for trends to emerge.