New-Home Market Starting to Simmer

New-home sales rose 6.8 percent in April to a seasonally adjusted annual pace of 517,000, according to the Commerce Department. More Americans purchased homes due to the steady job market, favorable interest rates, and escalating rents. Monthly sales of new homes have averaged 515,000 so far this year and, if continued at this rate, would mark the best performance since the first half of 2008. However, home prices are rising faster than incomes; and the tight supply of homes is another concern. The median price of a new home sold last month was $297,300, up 8.3 percent from a year ago. The market had 4.8 months of supply of new homes, well short of the six-month mark that many analysts consider healthy. | Read More