U.S. New-Home Sales Rise at Fastest Pace in Eight Years

U.S. new home sales posted their strongest month in more than eight years in April, while prices jumped to a record level. That suggests healthy demand alongside limited supplies across the housing market, according to a recent Wall Street Journal report. Here are some highlights:

• Purchases of new, single-family homes jumped 16.6 percent from a month earlier to a seasonally adjusted annual rate of 619,000. That was the fastest pace since January 2008.

• The median price of a new home—the point at which half of homes were sold above and half sold below—rose to $321,100 last month. That was up 9.7 percent from a year earlier and the highest level on record.

Sales of existing homes, which account for the bulk of the market, rose for the second straight month in April. Housing starts rebounded in April, leaving builders on pace to break ground on 778,000 single-family homes this year.

• From 1990 to 2000, new home sales averaged a 716,000 annual pace. Last year, Americans bought 501,000 new homes, the best performance since 2007 but still well off previous years.

• Low housing inventories have constrained the overall market and contributed to prices rising faster than wages for most would-be buyers. Highlighting the paucity of available units, the pace of sales on homes not yet started climbed to the highest level since May 2007.

• Inventories of new homes tightened in April. Based on the current sales pace, it would take 4.7 months to exhaust the supply of newly built homes on the market, compared with 5.5 months during the previous month. The total number of new homes for sale at the end of the month was 243,000.

Sign up to get “My Two Cents.” It’s a blog where I share my thoughts on everything related to real estate finance.