New-home sales still sluggish, but April’s looking better, industry analyst says

The slow start to warmer spring weather is being mirrored by a similar slow start to spring home sales. Traditionally the hottest time of year for new home sales, the season often gets going by mid-February and picks up in March. But not this year. “The March numbers are terrible,” says industry analyst Ron Desjardins of PMA Brethour Group. There were 355 new-home sales for the month, compared with 438 in March 2012, while year-todate sales are down to 915, from 981 last year. That’s not what Desjardins expected in January when he was making his predictions. “I actually felt we were going to rebound a little bit from last year … and that has not happened yet, so I’m out on a limb.” He agrees part of the poor showing is still due to mortgage rule changes last summer, making it harder for buyers to qualify for a home, but he also notes that federal government job restructuring last year “has pretty well gone through the mill … and the reality is nowhere near as bad as the perception. “It’s hard to put your finger on it,” he continues, “but the traffic numbers are certainly a bit on the low side compared to previous years, so there just aren’t as many people out there looking.” He doesn’t see any nervousness yet on the part of builders, although there are examples of discounting and incentives to entice buyers. “I don’t think anyone’s panicking by any stretch of measure,” he says. And there are signs things are improving. In weekly surveys of a sample of builders, he says “we are starting to see the spring rise … so we’re keeping our fingers crossed.”