Sales of new and existing homes reflect different impacts of the COVID-19 crisis, but analysts expect both categories to contribute to a rebound for the economy.
New Home Sales Rise in May
New home sales rose 16.6 percent in May to a seasonally adjusted annual rate of 676,000 and were 12.7 percent higher than a year ago, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales soared 45.5 percent in the Northeast, 29 percent in the West and 15.2 percent in the South. The Midwest was the only region to see sales dip during May, falling 6.4 percent from April.
“The gains for new home sales are consistent with the NAHB forecast that housing will be a leading sector in an emerging economic recovery,” said National Association of Home Builders Chief Economist Robert Dietz. “Consider that despite double-digit unemployment, new home sales are estimated to be 1.9 percent higher through May than the first five months of 2019.”
Median sales price was $317,900 and average sales price $368,800. Inventory stood at an estimated 318,000 single-family homes for sale, a supply of 5.6 months at the current sales rate.
“Lower months’ supply in May, at 5.6, points to additional construction gains ahead,” said Dietz. The May data, although reporting gains off a relatively weak April pace, add an additional data point of a housing rebound and marking housing as a leading sector in the developing economic rebound.”
Existing Home Sales Dip in May
Existing home sales fell for a third month in a row, said the National Association of Realtors. Sales slumped 9.7 percent from April to a SAAR of 3.91 million in May. Sales were down 26.6 percent from a year ago.
The median price for an existing home was up 2.3 percent year-over-year to $248,600 and increased in all regions. Housing inventory was 1.55 million units at the end of May, up 6.2 percent from April and down 18.8 percent from a year ago. Supply was estimated at 4.8 months at the current sales rate.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist. “Home sales will surely rise in the upcoming months with the economy reopening and could even surpass one-year-ago figures in the second half of the year.”
Single-family home sales were down 9.4 percent from April to a SAAR of 3.57 million. The median price for an existing single-family home was up 2.4 percent from May 2019 to $287,700.
Condo and co-op sales fell 1.28 percent from April to a SAAR of 340,000 units in May, down 41.4 percent from a year ago. Median price decreased 1.6 percent from May 2019 to $242,300.
“Relatively better performance of single-family homes in relation to multifamily condominium properties clearly suggests migration from the city centers to the suburbs,” Yun said. “After witnessing several consecutive years of urban revival, the new trend looks to be in the suburbs as more companies allow greater flexibility to work from home.”
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