Surge in South Drives Up U.S. New Home Sales

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The sale of new single-family properties turned North last month, and it was the South that was responsible for most of the gain. A shift in pricing patterns was detected.

New home sales during May numbered a preliminary 65,000, according to data jointly released Monday by the Census Bureau and Department of Housing and Urban Development.

Last month’s sales volume brought the total number of new U.S. home sales completed from Jan. 1 through May 31 of this year to
294,000 units.

After accounting for seasonal factors, the annual rate of new home sales was 689,000 — the strongest rate since November 2017’s downwardly revised 712,000. The rate accelerated from a downwardly revised 646,000 in April and jumped from the downwardly revised 604,000 in May 2017.

The National Association of Home Builders noted in a written statement that last month’s rate was the second-highest 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,” NAHB Chairman Randy Noel stated in the announcement.

LendingTree Chief Economist
Tendayi Kapfidze said in a written statement that a more valuable metric is the three-month average, which at 669,000 was at the highest level since the financial crisis.

Driving last month’s national gains was the South, where the seasonally adjusted annual rate of new home sales came in at 409,000, soaring from a month earlier by 18 percent
— the most of any region. The West rose a percent to 299,000, and no change left the Midwest at an annual rate of 87,000.

Only the Northeast experienced a month-over-month drop: 10 percent to an annual rate of 36,000.

At the end of last month, there were a seasonally adjusted 299,000 new U.S. homes for sale. The left a seasonally adjusted 5.2 month supply.

May’s median sales price was $313,000, and the average sales price was $368,500.

NAHB Senior Economist Michael Neal observed, “We saw a shift to more moderately priced home sales this month, which is an encouraging sign for newcomers to the market.”

Neal said despite expected gains in single-family production,
ongoing price increases for lumber and construction materials could impair inventory.

Mortgage Expert

Mortgage Daily Staff



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