Steel Markets
Surprising Decline in New Home Sales in May
Written by Sandy Williams
June 25, 2019
Sales of new single-family homes in May slipped 7.8 percent from April to a seasonally adjusted annual rate of 626,000. Sales were down 3.7 percent from May 2018, said the latest report from Commerce.
The median price for new homes sold last month was $308,000 and the average price $377,200. Inventory, estimated at 333,000 homes for sale at the end of May, represented a supply of 6.4 months at the current sales rate.
Regionally, sales increased 6.3 percent in the Midwest and 4.9 percent in the South. The Northeast and West saw sales drop by double digits in May, at -17.6 percent and -35.9 percent, respectively.
“This was a surprising drop due to recent softening of mortgage interest rates and continued low unemployment,” commented National Association of Home Builders Chief Economist Robert Dietz “Recent months’ data have been relatively positive, with the revised March pace of 705,000 being the second highest since the Great Recession. We expect a gain in June on lower interest rates, with possible upward revisions for the May estimates.
“The decline in May is off recent trends,” added Dietz.” However, for the first five months of the year, new home sales are 4 percent ahead of the sales pace of the initial five months of 2018.”
Sandy Williams
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