In a further sign that the housing market is rebounding from the COVID-19 pandemic, sales of newly built, single-family homes rose 16.6% to a seasonally adjusted annual rate of 676,000 units in May from a downwardly revised reading in April, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The May rate is 12.7% higher than the May 2019 pace.
“The May sales numbers are in line with rising builder sentiment,” said NAHB Chairman Chuck Fowke. “With home building considered an essential business, this solid sales report is another indicator that housing is leading the economic recovery.”
“In a sign of growing demand fueled in part by record low mortgage rates, builder price incentives eased in May and home prices registered an upturn,” said NAHB Chief Economist Robert Dietz. “Sales are 1.9% higher on a year-to-date basis, and our NAHB Home Building Geography Index points to construction gains in lower density markets like smaller metros and large metro exurbs in the months ahead.”
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 676,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Inventory fell to a 5.6 months’ supply, with 318,000 new single-family homes for sale, 16.4% lower than May 2019. Of that total, just 76,000 are completed, ready to occupy. The median sales price was $317,900. The median price of a new home sale a year earlier was $312,700.
Regionally, on a year-to-date basis new home sales were up in all four regions: 6.8% in the Northeast, 9.5% in the Midwest, 0.3% in the South, and 1.4% in the West.
NAHB Chief Economist Robert Dietz provides more analysis in this Eye on Housing blog post.