Preview: Due May 23 - U.S. April New Home Sales - Correction lower within a stable trend
We expect an April new home sales level of 695k, which would be a 4.0% decline if March’s surprisingly strong 7.4% increase to 724k is unrevised. March’s level was near the tip of the recent range but underlying trend continues to have little direction, suggesting a dip in April is likely.
Some housing sector surveys, such as the NAHB’s and MBA’s, showed modest improvements in April, but they remain subdued enough to be inconsistent with an extension of March’s new home sales gain. The March strength was probably inflated by a continued bounce from weather restrained data in January, a bounce that has probably run its course. March’s rise was also concentrated in the South, which we expect to lead April’s correction lower.
We expect the median price to rise by 2.0% on the month after two straight declines, but expect the average price to be unchanged after a modest increase in March. This would leave yr/yr data marginally negative in both series, the median at -0.9% and the average at -0.6%, though both significantly higher than respective March paces of -7.5% and -4.7%.
