New Home Sales Up in April, but March Revised Downward; Same for Durable Goods
Posted by Gregg Killoren on May 28, 2009
New home sales rose 0.3 percent in April 2009, much less than the 2.5 percent increase that analysts had expected. Adding to the disappointment, the figures for March 2009 were revised lower to reflect a 3.0 percent decline in new home sales for the month, compared to the originally-reported 0.6 percent drop. Monthly changes do not tell the whole story, however. Year-over-year the April new home sales were down 34 percent.
Home prices are still on the decline. The median price for new home sales dropped 14.9 percent to $209,700 in April 2009 from $246,400 in April 2008. Likewise, the median price for existing home sales fell 15.4 percent to $170,200 in April 2009 from $201,300 one year earlier. The average home price dropped 19.2 percent to $254,000 in April 2009 from $314,000 in April 2008.
Durable Goods Order Rise Unexpectedly
Orders for durable goods, items that are expected to last at least three years, rose 1.9 percent in April 2009, surprising analysts who had expected no change. However, orders for March 2009 were revised downward sharply, showing a 2.1 percent decrease from the originally-reported 0.8 percent decline. Year-over-year durable goods orders fell 27.3 percent in April 2009.
Part of the surprise increase was a surge in transportation-related durables, which increased 5.4 percent in the month. In another encouraging economic sign, durables inventories decreased in April by 0.8 percent. Declining inventories generally remove impediments to further growth by clearing out old products to make way for new products as, hopefully, demand increases.
Still, the overall picture is of an economy stabilizing after a severe contraction. Whether a recovery is upon us, it is too soon to tell.
