These days, the construction market will take any good news it can get. So it is likely at least somewhat pleased to hear that new home sales increased modestly in April, by 7.3%. This marks the second month straight that sales rose. The month's annualized, seasonally adjusted rate of 323,000 new home sales was the highest so far this year, though slightly lower than December's tally. Is an upward trend forming?
First, here's the chart since 2000, based on Census Bureau data:
You can see that even after the additional sales in March and April the numbers remain very, very low on a historical basis. Really, sales over the past two months remain in-line with the levels we've been seeing. New home sales would have to break the threshold of around 350,000 before we could say we're seeing something new. Instead of citing a new trend, we could just as easily hypothesize that the market continues to move sideways, remaining in the range of 275,000 to 325,000 new home sales.
This range became normal after the expiration of the home buyer credit last spring. At this point, nearly one year after its expiration, the market for new homes hasn't really improved.
Today's report does provide one kernel of hope that this a real upward trend is forming. New home sales increased across all four regions of the U.S. Although we saw the same phenomenon in December, this time around there's no one region mostly responsible for the rise in sales. Even the smallest regional increase, in the south, was 4.3% better than in March.