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Economy in Brief

U.S. New Home Sales Plunge in April as Prices Jump
by Tom Moeller  May 24, 2022

• Sales fall to lowest level in two years.

• Decline spreads throughout the country.

• Median sales price continues to increase.

The new home sales market is unraveling. New single-family home sales during April fell 16.6% (-26.9% y/y) to 591,000 units (SAAR). It was the lowest level of sales since the end of the recession two years earlier. This fourth consecutive monthly decline in sales occurred from 709,000 units in March, revised from 763,000. Earlier figures also were revised. The Action Economics Forecast Survey expected 750,000 sales in April. The data is generated by the U.S. Census Bureau.

Sales declined last month across the country. Sales in the South weakened 19.8% (-36.6% y/y) to 307,000, the lowest level since December 2016. Sales in the Midwest dropped 15.1% (-25.5% y/y) to 73,000, a five-month low. Sales in the West fell 13.8% (-12.4% y/y) to 163,000, the fourth consecutive monthly decline. Sales in the Northeast weakened 5.9% (+17.1% y/y) to 48,000 following two consecutive monthly increases.

The median price of a new home in April strengthened 3.6% (NSA, 19.6% y/y) to a record $450,600 following a 1.8% March increase. The average sales price of a new home increased 9.1% (31.2% y/y) to a record $570,300. These sales price data are not seasonally adjusted.

The decline in sales left the market for new homes flooded in April. The number of unsold new homes jumped 8.3% (40.1% y/y) to 444,000, the most since May 2008.

The seasonally adjusted supply of new homes for sale rose to 9.0 months in April, up from 5.6 months in December. The record low was 3.3 months in August 2020. The median number of months a new home stayed on the market fell to 2.8. The record low was 2.5 months in October of last year. These figures date back to January 1975.

New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

Untangling Persistent versus Transitory Shocks to Inflation from the Federal Reserve Bank of San Francisco is available here.

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