Mixed results in the U.S. housing market for April.
On Friday night, figures released for April showed sales for existing homes fell 2.6% to a seasonally adjusted annualised rate of 5.99 million. This was worse than the expected 6.11 million most economists were predicting and is the slowest turnover in 4 years. Sales for the year to April 2007 is down 10.7%. Meanwhile inventories rose 10.4% to the biggest supply in 15 years.
“We’ve been anticipating slower home sales because many sub-prime loan products are no longer available,” the realtors’ Yun said.
On Thursday night, sales of new homes surprised the market and surged 16%. Economists were expecting new home sales to reach 865,000, but rather the seasonally adjusted annual rate rose unexpectedly to 981,000 sales. The government, however, does gives caution to the figures as the standard error can be as high as 13% meaning from month to month the government can’t be sure if house sales rose or fell.
The reason for the surge is suggested to be falling prices. The median price for a new home is down 10.9% for the year and is the largest decline since 1970.
“When you slash prices and pile on the incentives, you move product,” wrote Mike Larson, an analyst at Weiss Research.
» Existing home sales fall to 4-year low in April – Market Watch, May 25th 2007
» New-home sales surge 16% in April – Market Watch, May 24th 2007.