Home sales flat; mortgage delinquencies rise

Image: Construction workers build a house
Construction is under way on this house in Las Vegas, but sales of new homes are down to less than half the rate of 2007.Ethan Miller / Getty Images file
/ Source: The Associated Press

Sales of newly built homes were flat in April, but are now 7 percent above the rock-bottom lows of January, another indication the three-year housing downturn could be ending.

The Commerce Department said Thursday that sales rose 0.3 percent in April to a seasonally adjusted annual rate of 352,000. But the increase came from a downwardly revised rate of 351,000 in March.

"It's still tough to be a builder," wrote economist Joel Naroff of Naroff Economic Advisors. "New home sales remain near the bottom."

The median sales price fell to $209,700, down almost 15 percent drop from a year earlier, but up nearly 4 percent from March. Prices are likely to remain weak for months as builders try to price their stock of unsold homes against bargain-priced foreclosures.

There were 297,000 new homes for sale at the end of April, down 4 percent from 310,000 in March and the lowest number of properties on the market in nearly eight years. At the current sluggish sales pace, it would take more than 10 months to exhaust the supply of new homes on the market.

"We aren't seeing a huge upswing in market conditions, but we aren't seeing things fall apart again, either," wrote Mike Larson, real estate analyst at Weiss Research.

But the competition from foreclosures continues unabated.

A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit, the Mortgage Bankers Association said Thursday.

The foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures.

The pain, however, is spreading throughout the country as job losses take their toll. The number of newly laid off people requesting jobless benefits fell last week, the government said Thursday, but the number of people receiving unemployment benefits was the highest on record. These borrowers are harder for lenders to help with loan modifications.