May 28, 2002: New Home Sales Increase In April
“This report is consistent with our latest builder surveys, which indicate that home buyers are still out there in force after a strong first quarter which now appears to have been even stronger than we thought,” said Gary Garczynski, president of the National Association of Home Builders (NAHB). The average sales rate for all of the first quarter was revised upward from 879,000 units to 903,000 units.
Garczynski attributed the housing sector’s strength so far this year primarily to low interest rates, positive house price movements, and unseasonably mild weather conditions. “Moreover, the current interest-rate environment remains quite favorable, with long-term mortgage rates recently down to as low as 6.8 percent and one-year adjustables around 4.8 percent.”
While the inventory of new homes for sale rose from 310,000 units to 316,000 units from March to April, Garczynski said that increase is not a matter for concern. “The entire jump is due to newly permitted homes that have not yet been started, which means builders are anticipating good sales conditions in the near future,” he said.
NAHB is forecasting strong home sales through the balance of this year. “Even with some anticipated upward movement in mortgage interest rates later in the year, we anticipate about 903,000 new-home sales for 2002 — down only slightly from last year’s record 908,000 sales,” said Garczynski.
Publication date: 05/27/2002