Sales of new single-family homes plummeted 11.9% in April, but housing industry leaders said Thursday that they weren't concerned because lower mortgage interest rates have already started to spur additional buying.
The report from the Commerce Department put April sales at 612,000 units on a seasonally adjusted annual rate, compared to 695,000 in March.
The March figure was the highest in a little more than a year and made the April decline--sharpest since a 12.5% drop in January, 1984--look all the worse by comparison.
"I don't really get terribly excited over one month's data, one up and one down," said Michael Sumichrast, chief economist for the National Assn. of Home Builders. "This generally supports the notion that housing has been doing less strongly than a year ago, and that is in line with what we've been saying for a year."
Below 1984 Level
New-home sales for the first four months of 1985 are 4% below what they were last year, and April sales this year were 5% below April a year ago.
Jack Carlson, executive vice president of the National Assn. of Realtors, said falling mortgage interest rates and continued strong demand will keep new-home sales at an average annual rate of 659,000 for the next few months.
Carlson also noted that existing-home sales, a national statistic compiled by his trade organization, improved 0.3% in April, reaching the highest level since 1980.
Warren Lasko, executive vice president of the Mortgage Bankers Assn., said loan application business has been brisk in the last couple of weeks, since mortgage interest rates took their last dip.
Lasko said the April sales figure was "a bit disheartening, but it's very likely we're going to see it turn around."
He pointed out that, while sales for the first four months of 1985 trailed the comparable period last year, the January-through-April sales pace is running ahead of the last four months of 1984.