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New-home sales fell in April as inventory of existing homes increased modestly and inventory of newly built homes hit their highest level since November 2022, according to data released Thursday by the U.S. Census Bureau.
Sales of newly built single family homes clocked in at a seasonally adjusted annual rate of 634,000, down 4.7 percent from March and 7.7 percent less than the rate recorded in April 2023, according to the Census Bureau. The median sales price of newly built homes in April was $433,500, up from $420,800 in April 2023. The average sale price hit $505,700, up from $501,000 a year earlier.
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The estimated supply of newly built homes available on the market at the end of April was 480,000, representing a supply of 9.1 months at the current sales rate, up from an 8.5 month supply recorded in March, according to the Census Bureau. The last time the inventory supply for new homes rose above nine months was in November, when 9.2 months of supply was on the market, according to the Federal Reserve Bank of St. Louis.
Existing-home inventory, meanwhile, rose 9 percent between March and April, to 1.21 million units, or 16.3 percent more than in April 2023 when the extreme shortage of housing made newly built home a popular alternative, according to the National Association of Realtors.
“As the inventory of existing homes has increased, homebuyers have choices and demand for new construction has cooled slightly,” Bright MLS Chief Economist Lisa Sturtevant said in a statement.
Sales also likely took a hit from mortgage rates, which are above 7 percent according to Freddie Mac.
“At the same time as supply begins to increase, demand is being challenged by high mortgage rates and affordability ceilings,” Sturtevant said. “Homebuilders have been offering concessions and building smaller homes in response to the tight conditions some homebuyers are facing.”
