New home sales rose higher than expected, while housing prices ticked up modestly, according to government data released today.
New home sales increased by 3.3 percent in April to a better-than-expected annual rate of 343,000 units, up from the 332,000 pace reported in March, according to data released today by the Commerce Department.
U.S. housing prices “rose modestly” in the first quarter of 2012, but failed to keep pace with inflation, according to the latest Home Price Index released today by the Federal Housing Finance Agency. This “purchase-only” index is compiled from home sales price information from Fannie Mae and Freddie Max mortgages.
Home prices gained 0.6 percent in the first quarter of 2012, according to the agency, for a 0.5 percent year-over-year increase. Prices for other goods and services rose 3.2 percent over the same period, resulting in an inflation-adjusted loss of 2.6 percent in home values, said the agency in a statement.
An “expanded data” home price index, introduced by the agency in August 2011, rose 0.2 percent over the last quarter, but fell 1.3 percent from the first quarter of 2011, according to the agency. The index includes transaction information from county recorder offices and the Federal Housing Administration.
The increase in the purchase-only Home Price Index may not be robust, but it does reverse a five-year trend in quarterly losses for the index. Only one other quarter – the third quarter of 2011 – has seen positive movement in the all-purchase Home Price Index since the first quarter of 2007.
“Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices,” Andrew Leventis, principal economist for the agency, said in a statement. Price movement varied significantly by region, ranging from a 10.3 annual increase in Hawaii to a 7.65 one-year loss in home prices for Delaware.
Strong one-year gains were also seen in Washington, DC, Iowa, Florida and North Dakota, while prices were weakest in much of New England and the Mid-Atlantic regions, as well as in California, Nevada and the state of Washington.
Record low interest rates, job growth and attractive pricing helped boost sales of existing homes by 3.4 percent in April, according to a report released yesterday by the National Association of Realtors. The seasonally adjusted annual rate of 4.62 million homes is up 10 percent from the 4.2 million pace for April 2011.
National median existing home prices jumped 10.1 percent in April to $177,400, said the association, and unsold inventory fell 20 percent year-over-year to 2.54 million existing homes. Unsold inventory peaked at 4.04 million homes in July 2007.
Recent data shows continued improvement in the housing market over the first quarter, said the National Association of Home Builders in a statement released today, but sales remain constrained by tight credit conditions.