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Economy in Brief

U.S. New Home Sales Rise to Six-Year High as Prices Improve
by Tom Moeller  June 24, 2014

New home sales during May increased 18.6% m/m (16.9% y/y) to 504,000 from 425,000 during April, initially reported as 433,000. The latest was the highest level of sales since May 2008 and beat expectations for 440,000 sales in the Action Economics Forecast Survey. These volume numbers are quoted at seasonally adjusted annual rates.

The median price for a new home increased 4.6% (6.9% y/y) to $282,000 and recovered most of its deepened April decline. The latest level nearly reached the record high. The average price of a new home slipped 0.5% (+1.7% y/y) to $319,200 following a deepened 3.9% April decline. It was the lowest price level in nine months.

Sales improvement in May was broad-based. The largest gain was in the Northeast where sales increased roughly one-half m/m to 34,000 (36.0% y/y). Sales in the West improved by roughly one-quarter (32.7% y/y) to 130,000. In the South sales gained 14.2% (11.8% y/y) to 266,000 while sales in the Midwest edged 1.4% higher (5.7% y/y) to 74,000.

The inventory of unsold homes ticked 0.5% higher (16.0%) to the highest level since December 2010. The months' sales supply of new homes dropped to 4.5 months, its least in eleven months. The length of time to sell a new home held steady m/m at 3.3 months, down from 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.

Economy to move down the road at a solid pace in 2014 and accelerate slightly in 2015 from the Federal Reserve Bank of Chicago can be found here.

U.S. New Home Sales May Apr Mar Y/Y % 2013 2012 2011
Total SAAR, 000s 504 425 410 16.9 430 368 306
Northeast 34 22 27 36.0 31 29 21
Midwest 74 73 56 5.7 61 47 45
South 266 233 235 11.8 233 196 168
West 130 97 92 32.7 106 97 72
Median Price (NSA, $) 282,000 269,700 285,400 6.9 265,092 242,108 224,317
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