April new home sales increased 3.3% from a revised March level. Except for the revised February figure, the April sales level of 343,000 was the highest since the end of the home buyer tax credit in spring 2010. In addition, the revisions added another 22,000 sales to the first quarter average. Inventories remained low and the increase in sales reduced the months of supply to 5.1 months, which together with the revised February level are the lowest levels since the end of the boom in late 2005.
The only region that did not gain was the South, which dropped 10.6% or 21,000 sales. The other three regions collectively are smaller than the South so their increase was all the more remarkable to offset the fall in the south. The South was the only region to experience an increase in March so some of the decline may have been an adjustment.
Median sales prices increased 4.9% and average prices increased 6.3% year over year. The increase is more likely to be a reflection of composition change including some shift in sales to more expensive West and Northeast regions. The share of homes sold for over $400,000 increased from 15% in the first quarter to 17% in April.
The modest increase in April is a prelude to the same gradual forward movement we should see through 2012 as the economy gains ground, employment continues to increase and consumer confidence improves. NAHB forecasts total new home sales for 2012 at 361,000.