U.S. sales of new homes last month registered the biggest drop in more than two years.
The Commerce Department said Tuesday that new home sales skidded 11.4% in April to a seasonally adjusted annual rate of 569,000. It was the biggest monthly drop since March 2015. Economists had expected a more modest retreat from March sales of 642,000, which were the highest since October 2007. Sales in April were still up 0.5% from a year earlier.
Sales fell in every region of the country, led by a 26.3% plunge in the West, the biggest drop since October 2010.
Economists were inclined to view the April reading as a one-month blip. Ian Shepherdson, chief economist at Pantheon Macroeconomics, called last month’s drop “a correction from the March cycle high, not a warning sign.”
“We expect sales to rebound somewhat in May, and to return to the March high, at least, over the next few months,” Shepherdson said.
A healthy job market is expected to give Americans confidence to buy homes. Employers added a solid 211,000 jobs last month, and the unemployment rate is at a decade-low 4.4%.
Last month, the median sales price of a new home slid 3% to $309,200.
There were 268,000 new homes for sale in April, the most since July 2009.
The Commerce Department reported last week that construction of new homes fell in April for the second straight month, reducing housing construction to the lowest point since November.