Sales of newly built, single-family homes rose 6.7 percent in May to a seasonally adjusted annual rate of 689,000 units after a downwardly revised April report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the second-highest sales report since the Great Recession.
“Sales numbers continue to grow, spurred on by rising home equity, job growth and reports of a greater number of millennials entering the single-family housing market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La.
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 689,000 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 299,000 in May, which is a 5.2-month supply at the current sales pace. The median sales price was $313,000.
“We saw a shift to more moderately priced home sales this month, which is an encouraging sign for newcomers to the market,” said NAHB Senior Economist Michael Neal. “Since the end of the Great Recession, inventory has tracked the pace of sales growth. While we expect continued gains in single-family housing production, inventory may be partially constrained by ongoing price increases for lumber and other construction materials.”
Regionally, new home sales rose 17.9 percent in the South to a post-recession high and remained unchanged in the Midwest. Sales dropped 8.7 percent in the West and 10 percent in the Northeast.