Unable to maintain March's upward trajectory, new single-family home sales dropped nearly 7% in April as experts try to pinpoint the cause behind this change in course. According to a National Association of Home Builders (NAHB) report on May 23, the decline in April sales led to a seasonally adjusted annual rate of 673,000 units, following March's pace of 723,000 units.
In a NAHB press release, NAHB Chairman Greg Ugalde said home sales experienced "stabilization and modest growth" at the beginning of 2019, but have now started encountering challenges as we enter the latter half of the year.
"Our builder surveys show that traffic is steadily increasing," Ugalde said in the release. "The challenge facing builders is how to deal with ongoing supply-side constraints such as a lack of buildable lots and labor that are putting upward pressure on housing costs."
NAHB Chief Economist Robert Dietz attributed March's strong sales to "lower interest rates and the use of builder price incentives."
With an inventory of 332,000 for roughly a six-month supply, the average new single-family home cost about $342,000, increasing by $27,800 over the past year. The South saw the most new home sales at more than 10%, with minimal gains in the West (6.7%) and the Midwest (2.3%). Meanwhile Northeast sales plummeted 17.6%.
—Andrew Michaels, editorial associate