The market for new U.S. single-family homes rebounded last month with a 2.9 percent increase to a seasonally adjusted annual rate of 610,000, the Commerce Department says in its latest update.
May’s increase came after a significant 7.9 percent drop in sales in April, which was the biggest monthly drop in eight months.
But the biggest takeaway from the May numbers is this: the median price of a home sold last month rose to a record $345,800, up 16.8 percent from a year ago. That new record comes as home [prices have been increasing on the heels of a customer demand which is outpacing supplies. That’s partly because of a shortage of available building lots.
“This month’s report is in line with our forecast, and consistent with solid builder confidence readings,” said NAHB Chief Economist Robert Dietz. “With more consumers entering the market, further job growth and tight existing home inventory, the new home sector should continue to expand.”
The inventory of new home sales for sale was 268,000 in May, which is a 5.3-month supply at the current sales pace.
Regionally, new home sales increased 13.3 percent in the West and 6.2 percent in the South. Sales fell 10.8 percent in the Northeast and 25.7 percent in the Midwest.