Newly constructed single-family home sales slumped by 11.4 percent in April to a seasonally adjusted rate of just 569,000 units in what is the first decrease this year, reported the Commerce Department this week. Even so, building companies dismissed the slump as a "minor setback" and chose to focus on the bigger picture, which shows new home sales are still up compared to the same period one year ago.
"Despite some slowness this month, total new-home sales in 2017 are up more than 11 percent from this time last year, and builders are optimistic about future market conditions," said Granger MacDonald, chairman of the National Association of Home Builders.
The total inventory of new homes stood at 268,000 in April, representing a 5.7 month supply at the current pace of sales. The median sale price of a new home last month was $309,200, the Commerce Department said.
The biggest slump in new home sales was seen in the West. There, sales fell by a whopping 26.3 percent compared to the previous month. The Midwest region saw a drop of 13.1 percent in new home sales, while the Northeast saw a decrease of 7.5 percent, and the South witnessed a 4 percent drop.
Still, the NAHB insisted that the slump was only temporary, and that it expected sales to get back on track for the remainder of the year.
"New-home sales were strong in the first three months of 2017, so some pullback in April is to be expected," NAHB Chief Economist Robert Dietz said. "However, our forecast calls for new-home sales to increase throughout the year, buoyed by rising household formations, continued job growth and tight existing-home inventory."