New-home sales in the US fell by much more than expected in April.
Sales slumped by 11.4% at a seasonally adjusted annual rate of 569,000, the Census Bureau said in its monthly report.
Economists had forecast that sales of new single-family homes fell by 1.8% at a seasonally adjusted annual rate of 610,000, according to Bloomberg.
“The seasonally adjusted price of new homes nationwide fell, which is encouraging to budget-conscious buyers, but most of that drop was most likely driven by weakness in the West, where homes tend to skew toward the higher price points,” Svenja Gudell, Zillow’s chief economist, said in a note.
Sales in the West fell by 26.3%, the most since October 2010.
“Inventory of new homes was also up, which is great news, but the price must be right to cater to large numbers of millennial buyers entering the market to buy their first home.”
Sales in March, which were revised higher, rose for a third straight month and lifted the pace at the start of the busy spring selling season toward the highs set in 2016.
Most of the sales, however, were not made in the affordable end of the market, or homes costing less than $200,000. Even though there’s demand from buyers, a shortage of affordable homes, along with prices rising faster than wage growth, is keeping many would-be shoppers out of the market.