New-home sales are up in April despite a poor outlook based on the National Association of Home Builders’ index for homebuilder confidence and a 4% drop in permit applications. The 7.3% increase to 323,000 new homes sold during the month beat out March sales by 23,000 homes, which was far better than expected. Even so, this figure is 23.1% below levels for last April. For more on this continue reading the following article from The Street.
Sales of newly built homes rose 7.3% in April to a seasonally adjusted annual rate of 323,000, the Commerce Department said early Tuesday, a bigger jump than expected.
The figure was expected to hold steady month-over-month at a rate of 300,000, according to consensus estimates at Briefing.com, after sales of newly built homes jumped by double-digit percentages in March to a slightly revised rate of 301,000. March’s new-home sales figure was originally reported at a rate of 300,000.
April’s new-home sales figure remained 23.1% below year-earlier levels.
The median sale price of new homes sold last month was $217,900; the average sales price was $268,900.
On a seasonally adjusted basis, there were 175,000 new homes for sale at the end of April, representing a 6.5-month supply at the current sales rate.
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The SPDR S&P Homebuilders(XHB), an exchange-traded fund that tracks the homebuilder sector, remains around 60% off its peak of $46.08 in early 2006. The iShares Dow Jones US Home Construction(ITB) ETF remains more than 70% off its peak of $50.10 in the spring of 2006.
The ETFs were 0.2% and 0.4% higher, respectively, Tuesday morning.
Data released last week showed that April housing starts dropped 10.6% while construction permits fell 4%.
The figures were discouraging since building permits are viewed as an indication of future home construction.
The National Association of Home Builders’ index of builder sentiment came in flat in May, month-over-month, despite a rise in home sales, as interest among potential buyers remained sluggish.
The NAHB’s confidence index, which measures builder perceptions of current single-family home sales and sales expectations for the next six months, held steady at a reading of 16, according to the report. Any reading below 50 indicates poor sentiment. The index has not been above 50 since April 2006.
"Builder confidence has hardly budged over the past six months as persistent concerns regarding competition from distressed property sales, lack of production credit, inaccurate appraisals, and proposals to reduce government support of housing have continued to cloud the outlook," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "In addition, many builders in this month’s survey cited high gas prices as a further contributor to consumer anxiety and reluctance to go forward with a home purchase."
Homebuilder stocks were mixed Tuesday morning. PulteGroup(PHM) gained 0.4%, Weyerhaeuser(WY) added 0.5% and Hovnanian Enterprises(HOV) rose 1.2%.
Laggards included Lennar(LEN), off by 0.7%, KB Home(KBH), down 0.7%, and D.R. Horton(DHI), which lost 0.9%.
This article was republished with permission from The Street.