U.S. new home sales surprisingly fall in April

New home sales in the U.S. surprised considerably to the downside in April. New home sales dropped 11.4 percent sequentially to 569k, as compared with consensus expectations of 610k. The figure for March was upwardly revised by 21k to 642k.

The fall in sales in April was widespread throughout regions. In the meantime, the months of supply rose from 4.9 to 5.7. Despite the surprisingly weak data, the three-month sales average stands at a strong 606k, greatly linked to two strong previous months.

New home sales have rebounded steadily since the sharp fall in December, and other housing market indicators also imply a stable rebound in the housing sector, although momentum is expected to slow slightly from the solid first quarter prints, noted Barclays in a research report.

After the weaker-than-expected new home sales data, the residential investment tracking estimate has been lowered by Barclays because of subdued broker commissions.

“Our Q1 GDP tracking estimate decreased by one tenth to 2.5 percent q/q/ saar after rounding. Our Q1 GDP tracking estimate was unchanged at 0.8 percent after rounding”, added Barclays.