U.S. new home sales miss consensus estimates, suggest a soft start to Q2

The United States’ new home sales fell by 1.5 percent m/m in April, to 662k. This was below the consensus estimates of 680k, although the m/m rate of decline was in line with what Barclays Research had forecast.

The miss relative to the forecast in level terms stemmed from downward revisions to Q1 data, with the cumulative revision from January totaling -41k. This suggests that the momentum in sales activity in Q1 was softer than what prior estimates suggested.

Much of the decline in April sales activity came from the West region, where sales fell by 15k. Sales edged higher in the South and Northeast and held steady in the Midwest. In other details, the average price of new homes jumped by 11.3 percent on the month, and pushed the annual pace of growth to 11.3 percent.

Inventories of new homes improved by 2k and pushed the months’ supply higher by a tenth, to 5.4. Recent homebuilders’ surveys have indicated that the traffic of prospective buyers of new homes remains steady at healthy levels, and homebuilders remain optimistic on the outlook for sales of new single-family units in the near future.

The decline in April sales suggests a soft start to the second quarter of this year. However, the substantial increase in the mean new home price helped offset some of the decline in sales volumes, and implies higher brokers’ commissions.

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