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.