RISMEDIA, June 3, 2010—Sales of newly built, single-family homes surged 14.8% to a seasonally adjusted annual rate of 504,000 units in April 2010 as consumers rushed to beat the deadline for expiring home buyer tax credits, according to data released by the U.S. Commerce Department. This was the strongest level of new-home buying activity since May 2008.
“Clearly the home buyer tax credit program, which concluded at the end of April, was successful in getting the housing market moving again by helping many families achieve the dream of homeownership,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Now that the program is over, other great buying incentives continue–including exceptionally favorable mortgage rates, very attractive home prices and the steadily improving economy–so there is good reason to expect the positive momentum to continue.”
“The surge of buying activity we have seen in the final two months of the tax credit program has been very encouraging, and has helped builders work down their standing inventories to near historic lows,” said NAHB Chief Economist David Crowe. “It stands to reason that this activity will level off over the next few months, as sales that would have occurred during that time were likely pulled forward to meet the April deadline. That said, today’s favorable home buying conditions, the recovering job market and reviving consumer confidence should help take the place of tax incentives to generate buyer demand.”
Three out of four regions posted substantial gains in new-home sales in April; the Midwest registered a 31.6% gain, the South, a 10.8% gain, and the West, a 21.7% gain. The Northeast posted no change in sales activity from the previous month.
The nationwide inventory of new homes on the market fell 5.8% to 212,000 units in April, its slimmest measure since October of 1968. Meanwhile, the month’s supply at the current sales pace declined from 6.2 in March to a modest 5.0 in April, the lowest since November of 2005.
For more information, visit www.nahb.org.