US new-home sales drop 11.4% in April, most in 2 years

WASHINGTON — U.S. sales of new homes last month registered the biggest drop in more than two years.

The Commerce Department said Tuesday that new-home sales skidded 11.4 per cent in April to a seasonally adjusted annual rate of 569,000. It was the biggest monthly drop since March 2015. Economists had expected a more modest retreat from March sales of 642,000, which were the highest since October 2007. Sales in April were still up 0.5 per cent from a year earlier.

Economists were inclined to view the April reading as a one-month blip. Ian Shepherdson, chief economist at Pantheon Macroeconomics, called last month’s drop “a correction from the March cycle high, not a warning sign … We expect sales to rebound somewhat in May, and to return to the March high, at least, over the next few months.”

A healthy job market is expected to give Americans confidence to buy homes. Employers added a solid 211,000 jobs last month, and the unemployment rate is at a decade-low 4.4 per cent.