April New Home Sales Better Than Expected

[JoshMclean]

U.S. April new-home sales unexpectedly jump 16%





By Rex Nutting
Last Update: 10:00 AM ET May 24, 2007




WASHINGTON (MarketWatch) - Sales of new U.S. homes unexpectedly surged in April, rising by 16% to a seasonally adjusted annual rate of 981,000, the Commerce Department said Thursday, far exceeding the 865,000 pace expected. Sales were boosted by plunging prices. The median price of a new home was $229,100 in April, down 10.9% in the past year. The inventory of unsold homes fell by 1.5% to 538,000, representing a 6.5-month supply. In March, the inventory was at 8.1 months. Sales in April were down 10.6% compared with April 2006. Sales in the first four months of 2007 were 20% lower than in the first four months of 2006. April sales were led by a 28% gain in the South and an 8.5% gain in the West. http://i.mktw.net/mw3/News/greendot.gif

[goofer44]

good news for the economy but sort of puts the kybosh on lower interest rates. but still the possitive of higher sales is very good news. it is subject to revisions later on though.

[destinsm]

Just shows the abilities of the big HB's taking the hit on price to increase volume... In the end this will kill resales and just create more foreclosures, short sales, and the like...

Price sacrifice for volume... sounds good in the headlines, but I think it will end up causing even more pain in the market than good and it is just part of the normal cycle back down to sanity, just my opinion though...

[JoshMclean]

Prices have to come down, the market was overinflated. Seems pretty normal in my opinion.

[robertsondavies]

after an historic 15 year run up in housing pricing, far outpacing income growth beyond any stretch in our history, such gains juiced even further by the most creative/fraudulent lending options in history, there is more to go down.

While the headline number of new home sales, which by the way does not take into account cancellations (and which data is gathered by the home industry itself) and has been subject to massive revisions, shows a "pick up", the sampling itself is questionable, the source of data is highly self interested and questionable, and the median price paid showed a large drop (which is the most believable part of the report)....

We'll know real estate has finally bottomed, when people liquidate second homes at large losses, just to escape the carrying costs, with an eye toward recouping such losses in the "easy game" of soaring stock prices... (which will then of course be very close to a peak) It will be just like in 2004 when everyone in Atlanta had a neighbor who was crowing at a cocktail party about appreciation in 2nd home real estate, and so everyone jumped in making the gains to 2004 look tame...

The same thing is about to happen in the stock market, one last swift ride higher which could last another year, give or take 6 or 12 months...


but hey, i have no crystal ball.

good luck to all... happy trading

[6thGen]

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[SHELLY]

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Pish-Posh.

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