New home sales move ahead in May

Despite rising mortgage prices and inflation, new home sales moved ahead significantly in May.

Sales of new single-family homes jumped 10.7% to a seasonally adjusted rate of 696,000 from the revised April rate of 629,000.

According to Robert Dietz, chief economist of the National Association of Home Builders, the surge was partly due to buyers racing to the market prior to the Federal Reserve raising interest rates this month. 

But the latest figure, released this morning by the U.S. Census Bureau and the Department of Housing and Urban Development, is 5.9% below the May 2021 estimate of 740,000.

The median price of new homes sold in May was $449,000, a 15% increase from the median price of $390,400 in May 2021.

Additionally, the average price jumped 14.8% to $511,400 in May compared to an average price of $445,300 for the same period last year.

Regarding inventory, the seasonally‐adjusted estimate of new houses for sale at the end of May was 444,000 representing a 7.7-month supply at the current sales rate.

Here’s how new home sales break down by region:

• In the Northeast, new home sales saw a massive decrease of 51.1%
• In the Midwest, sales declined 18.3%
• In the South, sales climbed 12.8%.
• In the West, sales jumped 39.3%.

This report is in contrast to the most recent existing-home sales report from the National Association of Realtors (NAR).

Released earlier this week, total existing-home sales fell 3.4% in May. This includes condos, co-ops, townhomes and single-family homes.

The NAR's report marked the fourth straight of declines for existing-home sales.

Existing single-family homes fell 3.4% in May and are down 7.7% from a year ago.