New home sales spring ahead in May

May proved to be a very solid month for new single-family home sales.

Sales of new single-family houses increased 16.6% to a seasonally adjusted annual rate of 676,000 from the revised April rate of 580,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported today.

Estimates for May are also 12.7% above the May 2019 figure of 600,000.

“The May sales numbers are in line with rising builder sentiment,” said new NAHB Chairman Chuck Fowke. “With home building considered an essential business, this solid sales report is another indicator that housing is leading the economic recovery.”

“In a sign of growing demand fueled in part by record low mortgage rates, builder price incentives eased in May and home prices registered an upturn,” said NAHB Chief Economist Robert Dietz. “Sales are 1.9% higher on a year-to-date basis, and our NAHB Home Building Geography Index points to construction gains in lower density markets like smaller metros and large metro exurbs in the months ahead.”

The median sales price of new homes sold in May rose nearly 5% to $317,000 from the April price of $303,000. The May 2020 median price is also 1.7% higher than the May 2019 price of $312,7000.

The average sales price for May was $368,800, increasing 4.5% from an average sales price of $352,300 in the previous month. Year-over-year, the average price for May is about 3% lower than the average price in May 2019.

The seasonally-adjusted estimate of new houses for sale at the end of May was 318,000, representing a 5.6-month supply at the current sales rate.

Here's how sales break down by region, month-over-month:

• In the Northeast, new single-family home sales soared 45.5%
• In the Midwest, new single-family home sales declined 6.4%.
• In the South, new single-family home sales are up 15.2%.
• In the West, new single-family home sales jumped 29%

This report follows yesterday's Existing-Home Sales report from the National Associaition of Realtors, which showed existing-home sales falling for a third straight month. 

The full Monthly New Residental Sales report for May 2020 can be accessed here.