Buyers shrug off economic uncertainty as new-home sales rise

According to a report from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), new homes in April sold at seasonally adjusted annual rate of 743,000, which is a 10.9% rise over March and a 3.3% increase year over year.

The number of available homes for sale jumped year over year by 8.6%, though it’s a slight drop compared to last march. The inventory and sales combination has resulted in 8.1 months of supply, an 11% drop month over month and a 5.2% rise annually.

The media sales price of new homes hit $407,200, 2% drop from last year.

“While today’s report appears optimistic at first glance, there are underlying concerns,” said First American Deputy Chief Economist Odeta Kushi in a statement. “The new-home sales report does not adjust figures to account for cancellations of sales contracts. Redfin recently highlighted a rise in home sales cancellations due to affordability challenges and heightened economic uncertainty. This trend suggests that sales figures might be overestimated.”

The South drove the national increase in sales, as it makes up around two-thirds of all new-home sales in any given month. The region rose year over year by 6.5% and 11.7% monthly.

The West, which makes up about 20% of new-home sales, rose by 1.3% annually and 3.3% month over month. The Midwest showed huge growth compared to March, with a 35% increase. The volatile Northeast drop significantly but the region only makes up 3% of new-home sales.

The new-homes sale numbers are in stark contrast to April existing-home sales, where a drop in the South drove a 2% national decline year over year.

The positive report suggests that President Donald Trump’s announcement of a new global tariff regime has not had a negative impact on homebuilders or buyers, at least not yet.

“With the pool of inventory refilling closer to typical levels, more builders are cutting their prices, just as existing home sellers are,” said Zillow Senior Economist Orphe Divounguy in a statement. “Despite economic jitters, lower mortgage rates combined with strategic price cuts and incentives from builders’ are helping more potential home buyers get home.”