April Home Sales Forecast: Retreat From Recent Highs

• Zillow expects existing home sales to fall 0.2 percent in April, declining to 5.59 million units at a seasonally adjusted annual rate (SAAR).
• New home sales should fall 3 percent from March, to 673,000 units (SAAR).

New home sales have surged since the start of the year, rising to their second-highest level since the housing bust in March – the post-bust record of 711,000 units (SAAR) was reported in November 2017. But we expect this three-month trend ended in April.

Both existing and new home sales beat expectations in March and have generally come in above forecasts during the first quarter of 2018. In April, we expect existing home sales to fall 0.2 percent to 5.59 million units at a seasonally adjusted annual rate (SAAR), down from 5.6 million units (SAAR) in March, and we expect new home sales to fall 3 percent to 673,000 units (SAAR). The National Association of Realtors (NAR) will report existing home sales on Thursday, May 24.

Strings of four or more consecutive months without a decline in new home sales have been rare in the history of the series, occurring in only 4 percent of the months since May 1963. The last string of four-plus months without a month-over-month drop in new home sales was from August to November 2013.

Still, even with a small decline in April, new home sales would be up 14 percent over the past year compared to a 0.9 percent year-over-year increase for existing home sales. The U.S. Census Bureau will report new home sales on Wednesday, May 23.