U.S. New Home Sales Decline Sharply in May; Prices Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
- Sales fall to lowest level since October.
- Declines spread throughout most of country.
- Median sales price strengthens to highest since January.
Sales of new single-family home sales declined 13.7% (-6.3% y/y) in May to 623,000 (SAAR) from 722,000 in April, revised from 743,000, and 659,000 in March, revised from 670,000 according to the U.S. Census Bureau. The Action Economics Forecast Survey expected sales of 693,000 during May. The sales gain occurred as the average 30-year fixed-rate mortgage rose to an average 6.82% last month from 6.73% in April, according to Freddie Mac. It compares to a low of 6.18% averaged in September of last year.
By region, new home sales varied across the country last month. Sales of new homes in the Midwest fell 7.1% (-3.7% y/y) to 78,000, after surging 29.2% during April. In the South, new home sales fell 21.0% (-15.5% y/y) to 349,000, following an 8.3% April rise. Sales of new homes in the West weakened 5.4% (+8.9% y/y) to 159,000, after rising 5.7% in April. To the upside, new home sales in the Northeast increased 32.1% (48.0% y/y) to 37,000 in May, after rising 3.7% in April.
The median sales price of a new home rose 3.7% (3.0% y/y) to $426,600 (NSA) in May after rising 1.9% to $411,400 in April. The average sales price of a new home rose 2.2% (4.6% y/y) to $522,200 in May, following a 1.0% April increase to $511,200 during April. The average price was 3.5% below a high of $541,200 in July 2022. These sales price data are not seasonally adjusted.
The number of unsold new homes on the market rose 1.4% (8.1% y/y) to 507,000 (SA) in May, after a 1.0% April decline. The seasonally adjusted months' supply of new homes for sale jumped to 9.8 months in May, the highest level since September 2022, after falling to 8.3 months in April. The latest reading remained above a low of 6.9 months in May 2023.
The median number of months a new home stayed on the market eased to 2.7 months in May, but remained up from a June 2024 low of 2.1 months. The latest number stood well above its record low of 1.5 months in both September and October of 2022, but remained below a high of 5.1 months in March 2021. These figures date back to January 1975.
New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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