US new-home sales drop 11.4% in April, most in 2 years

The median sales price for a new home was $309,200 in April, down from $318,700 in March and $321,300 in the year-ago period.

Purchases of new, single-family homes-a narrow slice of all US home sales-fell 11.4% to a seasonally adjusted annual rate of 569,000 in April, the Commerce Department said Tuesday.

Even with the pullback, total sales still were 0.5 percent higher than the same month in 2016. Despite the surprisingly weak data, the three-month sales average stands at a strong 606k, greatly linked to two strong previous months.

Labour market slack, marked by a 4.4% unemployment rate, is improving employment opportunities for young Americans, helping to strengthen demand for housing.

The Commerce Department said Tuesday that new home sales skidded 11.4% in April to a seasonally adjusted annual rate of 569,000. "However, our forecast calls for new home sales to increase throughout the year, buoyed by rising household formations, continued job growth and tight existing home inventory".

The housing market is at or near 10-year highs for newly built and previously owned homes, and economists said momentum is likely to continue throughout the year despite last month's dip. The U.S. dollar .DXY was slightly firmer against a basket of currencies.

But last month new-home sales fell in every region, led by a 26.3 per cent plunge in the West, the biggest drop there since October 2010. But with the lower rate of sales, this represents a 5.7-month supply of homes, up from 5.4 months in March. A report last week showed home building fell for a second straight month in April, hitting its lowest level in five months.

  • Zachary Reyes