New Home Sales Decline in May

Filed in Economics by on June 25, 2019 3 Comments
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for sale signSales of newly built, single-family homes fell 7.8% to a seasonally adjusted annual rate of 626,000 units in May, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. On a year-to-date basis however, new home sales for 2019 are 4% higher than the same period in 2018.

“The report shows growth in sales in the $200,000-300,000 price range, which indicates middle-class demand for housing is being supported by low rates and solid employment,” said NAHB Chairman Greg Ugalde.

“The May numbers are a bit surprising given lower mortgage interest rates and solid builder confidence data,” said NAHB Chief Economist Robert Dietz. “Based on these conditions, we expect June new home sales figures will show a rebound.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the May reading of 626,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 333,000 in May, representing a 6.4 months’ supply. The median sales price was $308,200. The median price of a new home sale a year earlier was $316,700.

Regionally, and on a year to date basis, new home sales are 7.5% higher in the South and 3.4% higher in the West. Sales are down 13.3% in the Northeast and 3.2% in the Midwest.

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Comments (3)

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  1. Jim Paulson says:

    Are sales tracked as pending or closed? I would think pending is a better near term forcasting model Since I can take 4 to 9 months to build a home. if an interest rate drop spurs a new sale if you only track the clothes there is a huge like factor before it shows up.

    • NAHB Now says:

      Jim, a new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed.

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