It’s been a lukewarm housing market recovery since the 2007-2008 crisis, punctuated by surging home prices, tight inventories and affordability issues keeping first-time buyers on the sidelines.
But in recent days, there are signs of a housing market that has pushed forward at a faster clip. New home sales hit their highest mark since 2008 in April. Sales of newly built, single-family homes rose 16.6 percent in April, from an upwardly revised March reading to a seasonally adjusted annual rate of 619,000 units. This is the highest sales pace since January 2008.
“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season,” said Ed Brady, chairman of the National Association of Home Builders, a home builder and developer from Bloomington, Ill.
Buoyed by the news, homebuilder stocks, including Pulte (PHM) and KB Home (KBH), have both rallied.
The inventory of new homes for sale was 243,000 in April, which is a 4.7-month supply at the current sales pace. The median sales price of new houses sold in April was $321,100.
Meanwhile, home price increases have not eased. The real-estate company Zillow forecast that prices in April would rise 2 percent year-over-year, but they jumped nearly 5 percent, according to its home-value index.
Existing home sales increased 1.7 percent in April to 5.45 million units at a seasonally-adjusted annual rate, according to the National Association of Realtors (NAR). It was their second consecutive monthly increase and the results beat expectations.
While demand has picked up, many buyers are left on the sidelines because of home prices out of reach and tight inventories feeding a sellers’ market.
Zillow also reports that tight for-sale inventories have eased somewhat and could have been a promising trend for home buyers. The inventory of homes for sale declined by 1.9 percent in April from March. On an annual basis, inventories have now been contracting for 11 consecutive months and are down 3.6 percent from April 2015, Zillow reports.