Home Sales Booming Despite Dip in April
New home sales declined by a relatively slight 3.5% in April but were still 33% above their rate of a year ago, the Commerce Department said Friday.
Single-family homes sold at a seasonally adjusted annual rate of 862,000 in April, down from the record 893,000 rate of March but still the third-briskest pace since the government began keeping the data in 1962. The second-highest rate was a 872,000-unit clip in October, 1978.
Industry officials said the April figures showed the real estate boom prompted by reduced mortgage interest rates is still under way.
‘Real Bright Spot in Economy’
“It reflects the fact that the housing sector is the real bright spot in the economy right now,” said Warren Lasko, executive vice president of the Mortgage Bankers Assn. of America. “I think the sales pace will be sustained at about the present level through May, June and maybe July.”
April’s decline came nowhere near offsetting a 20.7% increase in home sales from February to March. Contributing to the April dip was a 15% drop in new home sales in the South, a region hard hit by declines in the energy industry due to the plunge in world oil prices. All other regions of the country experienced increases in home sales in April: a 0.6%increase in the Northeast, a 2.2% rise in the Midwest and a 7.8% hike in the West.
The April deline was the first drop since a 6.5% fall in October.
Median Sales Price $92,000
“The 3.5% decline is not cause for concern,” said Glenn Crellin, chief economist for the National Assn. of Realtors. “The (April pace) reflects a very strong housing market.
“Lower interest rates have improved the housing affordability picture for thousands of families throughout the country and boosted new home activity 33% above the level record a year ago,” he added.
The median sales price of new single-family dwellings in April was $92,000; the average sales price was $113,000.
At the end of April, there were 336,000 homes on the market--the lowest supply of unsold new homes since May, 1984, when there were 332,000, according to Commerce Department analysts. For the first four months of 1986, there were 282,000 actual new single-family home sales, the highest four-month total in nine years.