New home sales down while housing demand strong
Job growth, wage gains support housing recovery
New home sales declined in April after a nearly 10-year high, the Commerce Department said Tuesday.
The sale of new single-family homes in the U.S. dipped to a seasonally adjusted annual rate of 569,000 units last month, Reuters reported. March’s revised new home sales hit 642,000 units, the highest level since October 2007.
The housing recovery is still going strong, experts say.
"Demand for housing remains strong, and the usual list of support factors hasn't changed, with the key items being job growth and wage gains," Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, told Reuters.
Those “support factors” include low mortgage rates, an improved unemployment rate (4.4 percent) and better job opportunities for young Americans, Reuters reported. .
A survey says builders are optimistic about the next six months of sales, Reuters reported, even though they’re having a hard time meeting demand and house prices remain high. (The cost of building materials is up and availability of lots and labor is down.)
"Builders are running up against shortages of developed lots and having increasing difficulty finding skilled construction workers," Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina, told Reuters.
Reuters reported that the inventory of new homes went up 1.5 percent to 268,000 units in April. That’s the highest level since July 2009, but less than half of the units on the market at the top of the 2006 housing boom.