The market for new homes weakened last month. New home sales declined 7.8% (-3.7% y/y) during May to 626,000 after falling to 679,000 in April, revised from 673,000. Sales of 680,000 had been expected in the Action Economics Forecast Survey. Despite the weakness, sales were 12.4% higher than the recent low in October. These sales transactions are recorded when sales contracts are signed or deposits are made.

The median price of a new home declined 8.1% last month (-2.7% y/y) to $308,000 and reversed the prior month's increase to $335,100. It was the lowest price since January and 10.3% below the record high of $343,400 logged during November 2017. The average price of a new home fell 2.4% (+1.2% y/y) to $377,200. Prior months' price figures were revised lower.

Sales were mixed m/m amongst the regions of the country. New home sales in the West fell by one-third m/m to 125,000 and added to the prior month's weakening. Declining by 17.6% to 28,000 were new home sales in the Northeast after an increase of nearly one-third during April. Rising by 4.9% to 389,000 were sales in the South as they fully reversed April's weakening. Sales in the Midwest rose 6.3% last month to 84,000 and made up half of the April decline.

The months' supply of homes on the market increased to 6.4 in May, but it remained well below the 7.4 months' supply reached in December. The median number of months a new home was on the market after its completion edged higher to 3.4 months, up from the low of 2.7 months in October.

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