New residential sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate, beating market expectations for an increase to 335,000, according to a Commerce Department report released Wednesday. Sales were up 9.9 percent compared with April 2011.
The government numbers came on the heels of an NAR report out Tuesday that existing home sales closed at a seasonally adjusted annual rate of 4.62 million in April, up from 4.2 million in April 2011 and 4.47 million in March. Investors are still responsible for most of the “rebuys” that are propping up that market sector.
The median price of a new home also rose in April to $235,700, up 4.9 percent from a year ago. The number of new homes available for sale gained 1.4 percent to 146,000 units, up from the unrevised 144,000 in March and marking the first monthly increase in new home inventories since April 2007.
Despite ongoing improvements, the new build sector of the market will likely remain depressed as long as an overabundance of distressed residential properties remain available.
Although signs of a pickup in existing home sales have appeared, new single-family home sales are trending sideways, and account for only 7.7 percent of total single-family home sales in April, well below the pre-recession long-term average of 17 percent. The new home sector is likely to remain under pressure until the market absorbs the glut of distressed homes, keeping 'normal' conditions out of reach for the foreseeable future.