Sales of newly built homes in the US fell by the most in four months in April signalling a softer start to the spring selling season.
US new home sales fell 6.9 per cent month-on-month in April to an annualised pace of 673,000, the US Census Bureau said on Thursday.
That marked the biggest monthly drop since December and was steeper than economists’ expectations for a 2.8 per cent slide to 675,000. Economists had expected a decline, though, given a jump in sales during March that was revised even higher to 8.1 per cent.
That comes after data on Wednesday showed sales of previously owned homes, which account for the largest slice of the housing market, continued to decline last month.
The retreat in housing activity comes even as wages have improved and mortgage rates have eased from their peak in the fourth quarter. The average commitment rate for a 30-year, fixed-rate mortgage was 4.14 per cent in April, down from 4.27 per cent in March, according to Freddie Mac, and compared with a rate of 4.54 per cent over calendar 2018.
However, a combination of ongoing labour and lot shortages have continued to weigh on housing affordability however. The median sales price of new houses sold in April 2019 was $342,200 — up 12 per cent from the previous month and up 9 per cent from a year ago.