New Home Sales Rebound; Prices Crush Previous Record

News

The report on May new home sales, released this
morning, paints a much brighter picture than last month’s release of April
data. In that report, the U.S. Census Bureau and the Department of Housing and
Urban Development said new home sales had dropped 11.4 percent from their March
level, to a seasonally adjusted annual rate of 569,000 units.  Today that rate was revised up to 593,000.

May sales improved on that report.  They were up by 2.9 percent from April to a
seasonally adjusted estimate of 610,000, cracking the 600,000 mark for only the
fourth time since the housing crisis began. 
Sales are now 8.9 percent higher than in May 2016 when the estimate was
560,000.  On a non-seasonally adjusted
basis, sales in May were 1,000 units higher than in April, at 58,000.

May’s annual rate of sales was at the high end of
expectations. Analysts polled by Econoday had been looking for results in the range
of 575,000 to 615,000 units.  The
consensus was 590,000.

The median sales price in May was $345,800 and the
average was $406,400.  A year earlier the
respective prices were $296,000 and $350,000.  This crushes the previous record of $332,700 and also represents a record increase in the year-over-year change (+16.8% vs May 2016’s median price of $296,000).

New home sales in the Northeast were down 10.8
percent from April and unchanged from the previous May. The Midwest also had
substantial declines, 25.7 percent month-over-month and 23.6 percent on an
annual basis.

The other two regions offset those losses, with
sales up 6.2 percent from the previous month in the South which also posted a
year-over-year gain of 15.0 percent.  The
West had 13.3 percent more activity than in April, 14.1 percent more year-over-year.

At the end of May there were an estimated 265,000
new homes available for sale (unadjusted), 60,000 of which are ready for
occupancy. The total is an increase of 6,000 from the previous month. This is
estimated to be a 5.3-month supply at the current sales pace, unchanged from
April. The median time that homes have been on the market is 3.1 months, down
from 3.7 months in April. 

 

 

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