Steel Markets

South Sends New Home Sales Soaring in May

June 25, 2018

New home sales took off in May, soaring 6.7 percent to a seasonally adjusted annual rate of 689,000 units from a downwardly revised April rate of 689,000, according to data from HUD and the U.S. Census Bureau. May sales were at the second-highest level since the Great Recession, driven by sales in the South.

“Sales numbers continue to grow, spurred on by rising home equity, job growth and reports of a greater number of millennials entering the single-family housing market,” said National Association of Home Builders Chairman Randy Noel.

Median sales price in May was $313,000 and the average sales price for a new home was $368,500. Inventory was estimated at 299,000 new homes for sale at the end of May, a supply of 5.2 months at the current sales pace.

“We saw a shift to more moderately priced home sales this month, which is an encouraging sign for newcomers to the market,” said NAHB Senior Economist Michael Neal. “Since the end of the Great Recession, inventory has tracked the pace of sales growth. While we expect continued gains in single-family housing production, inventory may be partially constrained by ongoing price increases for lumber and other construction materials.”

New home sales were at a post-recession high of 17.9 percent in the South and were unchanged in the Midwest. Sales dropped 8.7 percent in the West and 10 percent in the Northeast.