New Home Sales Tumble in May
The U.S. Census Bureau and the Department of Housing and Urban Development reported Thursday morning that sales of new homes in May slipped to a seasonally adjusted annual rate of 551,000.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The U.S. Census Bureau and the Department of Housing and Urban Development reported Thursday morning that sales of new homes in May slipped to a seasonally adjusted annual rate of 551,000, a decrease of 6% below the revised April rate of 586,000 and an increase of 8.7% compared with the May 2015 rate of 507,000. The consensus estimate from a survey of economists expected a rate of around 565,000. The April rate was revised downward by 33,000.
At the peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.
The Census Bureau also reported that the median sales price for new homes sold in May fell by $30,700 from $321,100 in April to $290,400, and the average sales price fell by $20,900 to $3358,900. At the end of May the number of new homes for sale totaled 244,000 and represented a supply of 5.3 months at the current sales rate.
[nativounit]
In May, 51% of the estimated 51,000 monthly sales were for homes priced at less than $300,000. The percentage is seven points higher than the April rate. Sales of homes priced between $300,000 and $399,999 fell by a point to 24% of all sales. Sales of homes in the range of $400,000 to $499,999 fell from 11% of sales to 9%, and sales fell from 14% to 10% for homes sold in a range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 6% of all new home sales in May, up from 5% in April.
The big increase in sales of lower-priced homes is the primary factor in the sharp drop in median and average prices in May. That may be good news because lower-priced homes are typically the choice of first-time buyers.
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
