- Jennifer Lee, a senior economist at BMO Capital Markets
Sales of new U.S. homes rebounded in April after two consecutive months of declines, and the stock of houses on the market rose to the highest level in three and a half years, but analysts still do not think that the market is gaining momentum. Sales rose 6.4% to a seasonally adjusted annual rate of 433,000 units, according to the Commerce Department. That compares to the upwardly revised 407,000 in March, when purchases declined 6.9%. Sales also dropped 4.4% in February, partly due to harsh winter weather. Newly built homes demand remains one of the missing elements of the almost 5-year-old recovery from the Great Recession, as sales of new homes are running at around half the rate of a healthy real estate market. Demand continues to remain strong for the most luxurious properties, but falters for starter homes and those priced for middle class buyers. However, it is expected that warmer weather will spur activity in the housing market.
Sales of existing homes rose slightly in April, but the pace of purchasing remains below the level seen last year. Sales inched higher 1.3% from March to a seasonally adjusted annual rate of 4.65 million. Buying of homes over the past 12 months have declined 6.8%. The median rise for an existing home has increased 5.2% to $201,700.
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