Home sales increase 2.3 percent in April
The housing market is slowly gaining recovery as home sales in the U.S. rose in April. An increase in 2.3 percent was reported from April to March and was adjusted to an annual rate of 454, 000, according to the Commerce Department. The adjusted rate is only just lower than the January value of 458,000.
Americans are starting to gain footing in buying new homes as steady job creation and low rates trend in the country. Although the sales are still below the 700,000 of healthy markets, the country has seen a 29 percent rise over the past year.
Median sales increased to 8.3 percent in the same month to $271,600.
The recent increase in price boils down to the rise in demand with more buyers bidding on the limited number of properties available.
A 3.3 percent increase, approximately 156,000, was also reported in the supply of new homes in April.
The price increase is being matched by developers ensuring that supplies keep up with the inventory of homes. Builders are developing more homes and April has seen a surge in requests in construction permits.
The sales of new homes rose to 10.8 percent in the West and 3 percent in the South. However, the Northeast experienced a decrease to 16.7 and 4.8 in the Midwest.
Aside from new homes, resale prices are also increasing. While they remain below the levels they attained before the bubble burst, the continued increase in price reflects the renewed confidence of buyers to spend more. According to Bernanke, “Higher prices of houses and other assets, in turn, have increased household wealth and consumer confidence, spurring consumer spending and contributing to gains in production and employment.”
Annual increases were also reported by many big-ticket developers.
It may seem that the sales of new homes are insignificant due to their being representative of a small fraction of the housing market. However, this growth creates an impact on the overall economy. As new homes are built, more jobs are created. The increase in jobs along with the number of properties available creates an economic environment that points to right direction towards smooth recovery.