While the headline figures are disappointing, this decline in new home sales does not reflect the overall health of the housing market. The strong reading from March greatly exceeded expectations and was revised upward today; without that revision, April’s month-over-month decline would be just 2.7%–and the underlying trend in sales remains strong. Builders are finding ways to deliver homes despite expensive land and labor prices, a boon to buyers thirsty for more supply. Strong builder confidence was borne out by last week’s encouraging home starts figures, which suggest that the supply of new homes is poised for growth. This strength, combined with enduring low mortgage rates and a historically strong job market suggest that today's reading is just a slight step back in the continued recovery of new home sales.
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via April New Home Sales: Better Than They Seem
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