April New-Home Sales In US Jump To Highest Since 2022 As Prices Fall And Inventory Builds Up

U.S. new-home sales climbed to their highest level since February 2022, surging 3.3% to a 743,000 annual rate since last year.

According to data released Friday by the U.S. Census Bureau and the Department of Housing and Urban Development, April’s numbers are 11% higher than last month. 

The monthly rise in sales came alongside modest shifts in both inventory and pricing. At the end of April, the number of new homes for sale stood at 504,000, slightly declining from 507,000 the previous month. Compared with April last year, the total for-sale inventory was up 8.6%.

At the current sales pace, the market reflected 8.1 months of supply in April, down from 9.1 months in March, but still higher than the 7.7-month supply level recorded a year earlier. 

Pricing data was mixed. The median sales price of a new home in April was $407,200, up slightly from March’s $403,700 but down 2% from $415,300 in April 2024. 

The average sales price rose sharply to $518,400, an increase of 3.7% from the prior month and 3.6% from a year ago. This suggests that higher-end sales may have contributed to the monthly gains.

April sales data may offer a positive signal for home improvement brands like Home Depot (HD) and Lowe’s Companies (LOW) as housing turnover remains subdued and residential construction has shown limited momentum. 

Earlier this week, during Home Depot’s first-quarter (Q1) earnings call, CEO Edward Decker noted that despite strong fundamentals like high home equity levels and wage growth, persistent macro uncertainty and elevated interest rates have delayed a rebound in larger remodeling projects.

“We’ve yet to see that large project,” Decker said. While smaller DIY activities have picked up, including painting and yard work, he said a broader remodeling cycle is still on hold until consumer confidence improves.

During the company’s most recent earnings call, Lowe's Executive Vice President Joseph McFarland also alluded that sales under its Pro customers, which include contractors, remodelers, and other professionals, feel less confident and cautious about the overall macro environment. 

The SPDR S&P Homebuilders ETF (XBH) edged 0.4% lower in midday trade on Friday. XBH’s stock has fallen over 10% this year. The iShares U.S. Home Construction ETF (ITB) slipped 0.5% in midday trade. ITB’s stock is down nearly 14% this year. 

Meanwhile, the broader market also trended lower after President Donald Trump proposed 50% tariffs on goods imported from the European Union, and warned about a 25% tariff on iPhones manufactured outside the U.S.

The SPDR S&P 500 ETF Trust (SPY) was down 0.7%, and the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, dropped 1%. The SPDR Dow Jones Industrial Average ETF (DIA) tumbled 0.65% in midday trade.

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Read also: Trump Proposes 50% Tariffs On EU, Threatens Apple With 25% Levies on Foreign-Made iPhones