Sales of new single-family homes in April are up 10.9 percent to a 743,000 seasonally adjusted annual rate. The level is above the consensus of 700,000 in the Econoday survey of forecasters. The report includes annual revisions. Sales in March are revised substantially lower to 670,000. April sales are up 3.3 percent compared to a year ago.

Buyers of new single-family homes likely acted to take advantage of a dip in mortgage rates. Sales in April reflect contracts signed that probably used mortgage rates locked in in March and early April. The Freddie Mac rate for a 30-year fixed rate mortgage rate was at 6.63 percent in the March 6 week but rose incrementally for a few weeks after and then declined to 6.62 percent in the April 10 week. Rates took a jump of 21 basis points to 6.83 in the April 17 week and have remained elevated since then. It remains to be seen if the current higher mortgage rates will choke off new home sales in May at the start of what is usually the busiest home sales period of the year.

Sales are up in three of four regions and show an uneven performance for the new single-family home market in April. The Northeast has declined of 14.8 percent. Sales climb 35.5 percent in the Midwest where homes are typically more affordable. Sales are up 11.7 percent in the South and 3.3 percent in the West.

The supply of new single-family homes on the market is down to 8.1 month's worth after 9.1 months in March and 7.7 months in April 2024. Homebuilders have been cutting back on new construction. With prices and availability of construction materials uncertain, and labor costly, builders are cautious about starting new projects. New projects are tilting to smaller homes to reach the entry level market. The price of a new single-family home is up 0.9 percent in April to $407,200 from March but down 2.0 percent from $415,300 a year ago.

The dip in mortgage rates in March and into early April encouraged homebuyers to commit to buying before the unit was done. In April, 11 percent of new single-family homes sold are units not yet started and 36 percent are units under construction. Completed single-family homes account for 53 percent of the total.

Sales expected down at 700K rate in April from 724K in March, reflecting poor affordability and consumer caution.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.