Steel Markets
New Home Sales in May Slip After April's Surge
Written by Sandy Williams
June 23, 2016
Sales of new single family homes were at a seasonally adjusted annual rate of 551,000, according to the latest data from the Department of Commerce. May’s sales were 6.0 percent below the revised April rate of 586,000 from the initial estimate of 619,000. Year over year sales were up 8.7 percent.
A poll by Reuters forecast the annual rate would slide to 560,000. New home sales are known to be volatile and April’s 12.3 percent surge in sales was considered unsustainable. May’s level appears to be a more accurate assessment of the current new housing market.
The median sales price for a new home in May was $290,400 with the average price at $358,900. Approximately 244,000 new homes were for sale at the end of the month representing a 5.3 month supply at the current sales rate. Inventory has been tight and the rise from 4.9 months in April gives buyers a bit more selection.
Employment gains and low mortgage rates continue to support a growing housing market.
“Although new home sales are down from a robust reading in April, they remain solid and builder confidence in the market is growing — two indicators that the housing sector should strengthen throughout the year,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.
Regionally, new home sales rose by 12.9 percent in the Midwest. Sales fell by 0.9 percent in the South, 15.6 percent in the West and 33.3 percent in the Northeast.
Sandy Williams
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