U.S. new home sales data for the month of April is set to release tomorrow. According to a Wells Fargo research report, the wide rebound in purchasing conditions is expected to keep home sales on an upward trend in the next several months. However, a repeat of last month’s 4.5 percent sharp rise in sales is not expected.
“We look for a modest drop in sales to a still-solid 685,000 unit pace during April”, said Wells Fargo.
New home sales have been bolstering at lower price points. In March, around 50 percent sales were priced below USD 300,000, which is up from about the 43 percent average in 2018. Homebuilders have mostly responded in kind and shifted their focus toward constructing lower-priced homes. Builders have also responded to increasing inventories by offering price discounts to entice potential buyers off the sidelines. Therefore, the median sales price dropped 9.7 percent year-on-year to USD 302,700 in March, the fifth straight fall.
“Easing home prices and lower mortgage rates should lay the groundwork for a modest pickup in new home sales over the next few months”, added Wells Fargo.
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