New single-family home sales crept up again during April, a further sign that the building industry is finally beginning to show signs of life after years of misery and decline.
According to newly released Commerce Department housing data, sales of new homes grew by 3.3% over the last month, a rise of 9.9% since April 2011.
Barry Rutenberg, Chairman of the National Association of Home Builders, told the Wall Street Journal that April’s increase in sales activity demonstrates a continuing, albeit gradual improvement for the industry, driven by hungry consumers looking to capitalize on low prices and interest rates.
Rutenberg pointed out that if it were not for strict lending rules, the outlook would most likely be even better:
"In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes."
The Midwest saw the biggest increase in new home sales, rising by 28.2% in April. This was followed by the Northeast, which saw a rise of 7.7% in new home sales for April.
The south remains a problem, with new home sales declining by 10.6% in the last month.
New home inventories remain at a historic low level of just 5.1 month’s supply, going by today’s pace of sales. However, even this is not a problem, with experts saying that the low inventory should in turn lead to a boost in home prices in the future.
Indeed, prices for new homes have already risen by 5% on average over the last year. The Commerce Department reports that the median sales price of a new home was $235,700 in April.