The growth in the number of new single-family homes sold in the U.S. carried momentum into the second quarter of the year with prices increasing as well, according to Reuters. On Tuesday, the Commerce Department reported that sales increased 7.3% in April from the month before to a seasonally adjusted level of 323,000, which outpaced economists’ forecasts. April’s level of home sales is the highest sine December, although prices were off 23.1% year-over-year.
The data showed that a record low of just 175,000 new homes were on the market in April, which is 2.8% lower than March and drove median prices up 1.6% to $217,900. Prices were up 4.6% year-over-year. The increased sales pace recorded in April and lowered availability of homes brought the supply of new homes on the market down to 6.5 months’ worth from 7.2 previously, marking the lowest level in one year. Millan Mulraine of TD Securities pointed to “the huge inventory of unsold homes” for holding back the market’s recovery, asserting that the backlog would need to be erased “before we can see an upward momentum in prices.”