Housing Bubble

New home sales data bodes well for season say builders

May 27, 2003

Indicating that a key source of strength for the nation’s economy continues to fire on all cylinders, sales of new single-family homes rose 1.7 percent in April to a seasonally adjusted annual rate of 1.03 million units, the Commerce Department reported today. It was the third time this year that new-home sales went above the million-unit mark. Sales of existing homes also rose strongly last month.

"Today’s reports on both new and existing home sales in April are very reassuring that housing continues to be a pillar of strength for the nation’s economy. This sales performance provides solid evidence of the confidence that buyers continue to have in homes as investments," said Kent Conine, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Dallas. "The news also bodes well for the remainder of the spring home buying season and beyond because there has been another downshift in mortgage interest rates and a further boost in consumer confidence since April."

New-home sales rose in three out of four regions in April, with gains of 13.4 percent, 0.6 percent and 4.3 percent recorded in the Midwest, South and West, respectively. In the Northeast, where shifting weather patterns have caused wild fluctuations for several months, sales fell nearly 18 percent.

"Sales of both new and existing homes were slightly above their first-quarter averages in April, and the fundamentals of this housing market continue to exhibit remarkable strength looking forward," noted NAHB Chief Economist David Seiders. "With inventories of unsold new homes remaining at quite a healthy level, with impressive house-price performance on a year-over-year basis, and with our latest surveys indicating significant optimism among home builders, we’re clearly headed for a great second quarter. When you add in the terrific interest rate picture, all systems are ‘go’ for home sales - we are definitely on track to equal or surpass the record home sales of 2002."

Source: National Association of Home Builders