WASHINGTON -- Sales of new single-family homes increased 16.2% in April to a seasonally adjusted annual rate of 981,000 units, according to figures released by the U.S. Commerce Department on May 24. The April sales pace was 10.6% below a year earlier. The increase followed downward revision to the sales rate for the previous month, and the sales pace remained below the 1 million-unit pace for the fourth consecutive month.
“Builders are pulling out all stops to work down heavy inventories in the face of weak demand that's been exacerbated by the subprime-related tightening of mortgage credit conditions,” said Brian Catalde, a home builder from El Segundo, CA, and president of the National Association of Home Builders (NAHB), a Washington-based trade association representing more than 235,000 members. “Our surveys show that the majority of builders are cutting prices and offering substantial non-price sales incentives, and their efforts are bearing fruit.”
“The first quarter may well have marked the low point for sales volume in the dramatic housing correction that began in the latter part of 2005,” said NAHB Chief Economist David Seiders. “We are currently looking for a gradual recovery process going forward, at least on a quarterly basis. We're viewing the large jump in new-home sales for April with a lot of caution, in view of the large month-to-month volatility historically displayed by these statistics.”
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