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Despite falling inventory levels, new single-family home sales hit their highest level in April since 2008. Will there be any room to move up from there? The May 2016 report on new home sales will be released on Thursday, June 23.
In April. HUD and the Census Bureau estimated that new home sales went at a seasonally adjusted annual rate of 619,000, a 16.6 percent increase from March's rate of 531,000 and an increase of 23.8 percent from April 2015’s estimate of 500,000.
Those numbers bode well for housing for the remainder of the year, according to Trulia chief economist Ralph McLaughlin.
"The gain reflects a sharp increase in demand from homebuyers and a healthy U.S. economy, and should put to rest fears of an oncoming recession,” McLaughlin said. “April’s large jump should also instill homebuilder confidence throughout the remainder of the year.”
Existing-home Sales—National Association of Realtors—Wednesday, June 22
Existing-home sales defied the odds in April by overcoming inventory shortages, soaring home price appreciation, and stagnant household income growth to rise by 1.7 percent to a seasonally adjusted annual rate of 5.45 million. It was the second consecutive months of increases for existing home sales, which have been up and down over the last year.
Can they do it again and increase a third straight month? The industry will find out on Wednesday, June 22, when the National Association of Realtors releases the existing-home sales report for May 2016.
It is quite possible. Realtor.com Chief Economist Jonathan Smoke said that the two-month streak of increases has brought existing home sales in line with the seasonally adjusted pace of sales at the beginning of the year and 6 percent higher than last year. This shows that momentum is continuing from a strong start to the year as the peak months for sales approach.
Affordability is a concern despite the current ongoing low mortgage rate environment.
“The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow,” NAR chief economist Lawrence Yun said.
Yun was still optimistic about the summer homebuying season despite the affordability concerns.
“Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months,” Yun said.
This week's schedule
Wednesday, June 22
FHFA House Price Index, 9 a.m. EST
Janet Yellen, Federal Reserve Chair, Semi-Annual Testimony Before the House Financial Services Committee, 10 a.m. EST
Existing-home Sales for May 2016, National Association of Realtors, 10 a.m. EST
Thursday, June 23
New Home Sales for May 2016, 10 a.m. EST
