New homes are selling at the fastest pace since before the financial crisis.
The Census Bureau said Tuesday that new home sales spiked 16.6% at a seasonally adjusted annual rate of 619,000 in April.
That’s the best month since January 2008.
Rising mortgage applications were a tell that stronger new home sales were coming, said Pantheon Macroeconomics’ Ian Shepherdson in a note.
“The new home sales numbers are wildly volatile so it’s hard to separate the signal from the noise over short periods,” he cautioned.
“Still, the jump in April is statistically significant — just, the margin of error is +/-15.4% — and it is consistent with the increase in mortgage demand.”
Economists forecast that sales of new single-family homes rose 2.4% at a seasonally adjusted annual rate of 523,000, according to Bloomberg.
The biggest regional gains in April came from the South, with 352,000.
The supply of homes tightened to 4.7 months from 5.5 months.
At the same time, the median sales price of a new home rose 10% year-on-year to a record $321,100, “leaving many first-time home buyers in the dust, as mortgage affordability for entry-level buyers is starting to become an issue in many markets,” according to Svenja Gudell, Zillow chief economist. This could worsen when mortgage rates rise above 4%, she said in a note.
This is the first of several pieces of housing data out this week; others include prices and pending home sales.
New home sales fell 1.3% at a rate of 531,000 in March, mostly because of weakness in the West, where home prices are rising faster than virtually anywhere else.