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My morning coffee suddenly tastes even better! From today's MarketWatch, see the not so subtle headline and article below:

May 24, 2011, 10:34 a.m. EDT

U.S. NEW HOME SALES RISE 7.3% IN APRIL

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — U.S. sales of new homes posted their second solid monthly gain in April after hitting extremely low levels in February, according to data released Tuesday by the Commerce Department.

In April, sales rose 7.3% to a seasonally adjusted annual rate of 323,000 after an 8.3% increase in March, the Commerce Department reported.

The increase surprised economists, who had forecast a slight decline to 295,000, according to a MarketWatch survey.

Sales gains took place in all four regions. Sales rose 15.1% in the West, 7.7% in the Northeast, 4.9% in the Midwest and 4.3% in the South.

Those gains followed February’s steep drop to a 278,000-unit pace. Analysts had attributed that weakness in part to winter storms that depressed figures in the East and the Midwest as well as a California tax credit that has expired

Increases in the past two months have come as the new-home market is near the bottom. Compared with April 2010, last month’s sales were down 23.1%.

In April, the number of unsold new homes on the market slipped 2.8% to a record-low 175,000. That represented a 6.5-month supply at the April sales pace, the leanest inventory since last April.

The inventory of new homes under construction also fell to a record-low 78,000 in April. The number of completed-but-unsold homes fell to 67,000, the lowest level since August 1999.

April’s median sales price of $217,900 was up 4.6% compared with a year earlier.

The government cautioned that its housing data are subject to large sampling and other statistical errors. Large revisions are common.

The standard error of 16.6% is so high, in fact, that the government cannot be sure sales increased at all in April.

On a three-month moving average — which reduces the month-to-month variance in the hugely volatile release — sales rose to a 300,000 rate from 296,000.

Economists at Barclays Capital noted that new-home sales have been range-bound at 275,000 to 310,000 since last May, when the effects of the federal tax break for home buyers began to wane.

By comparison, new-home sales averaged a 1.05 million pace per month in 2006, just when the housing bubble was beginning to collapse.

Greg Robb is a senior reporter for MarketWatch in Washington.

Pat Palmer-Realtor/Broker
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