April is an even-numbered month, which apparently means that new home sales fell again. In each of the odd-numbered months this year (January and March) new home sales rose. However, it was just the opposite case in the even-numbered month of February, when new home sales fell. And they fell again in the fourth month of the year.
New data from the Census Bureau and the Department of Housing and Urban Development shows that new home sales fell by 5.9% in April below March’s totals.
It should be noted, though, that new home sales in April were 48.3% higher than they were in April 2020.
According to the National Association of Home Builders, “rising building materials costs and low inventory” drove new home prices up by 20% on a year-over-year basis, which significantly impacted sales.
“After a period of builders holding back price increases, new home prices were 20% higher year-over-year per the April Census data,” said NAHB Chief Economist Robert Dietz. “Higher prices have priced out buyers, particularly at the lower end of the market. A year ago, 45% of new home sales were priced below $300,000. In April 2021, only 27% of new home sales were priced below $300,000.”
NAHB Chairman Chuck Fowke said that homebuilders are working to mitigate the effects of increasing costs.
“A growing number of builders are limiting sales in order to manage supply chains, including access and cost factors associated with lumber, appliances and other building materials,” Fowke said. “Policymakers need to find ways to improve the supply chain, by facilitating more domestic production, or in cases where that cannot be done, suspending tariffs to allow for more imports.”