Housing gives back some gains

Don Hogsett, May 31, 2004

The broad American housing market showed signs of softening during April, reversing most of the gains of the prior month. Housing starts and new home sales both declined, and only the large market for lower-cost existing home sales continued to advance.

Notably hard hit was the highly volatile market for sales of costly new homes — subject to wide monthly swings and frequently sharp revisions. The category dropped 11.8 percent, giving up all of the prior month's gain of 9.7 percent, revised upward from a previously estimated 5.8 percent. New home sales fell in three of the nation's four regions, gaining only in the Midwest, where sales advanced 10.8 percent. Particularly weak was the South, where sales of new homes tumbled 22 percent.

Housing starts — a gauge of future housing activity and, to some extent, home-builder confidence — slipped 2.1 percent, following a revised gain of 6.1 percent in March. Dragging the market segment down was a steep 13.7 percent drop in sales in the West, offsetting gains in the Northeast, Midwest and South.

Sales of existing homes, by far the largest piece of the housing market, grew for a third straight month, rising 2.5 percent, building on gains of 5.8 percent in March and 2.2 percent in February.

Housing by region
Month-to-month % change

Existing home sales Housing starts New home sales
Source: U.S. Department of Commerce and National Association of Realtors
Northeast 1.4% 0.6% -2.5%
Midwest 4.4 4.5 10.8
South 3.5 1.2 -22.0
West 0.5 -13.7 -9.4

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