New home sales fell 7.8% in May compared with April to a seasonally adjusted annual rate of 626,000, according to estimates from the U.S. Census Bureau and the Department of Housing and Urban Development.
That’s down 3.7% compared with May 2018 and well below projections.
“The May numbers are a bit surprising given lower mortgage interest rates and solid builder confidence data,” says Robert Dietz, chief economist for the National Association of Home Builders (NAHB), in a statement. “Based on these conditions, we expect June new home sales figures will show a rebound.”
It was the second consecutive month that new home sales dropped on a month-over-month basis. Traditionally, April and May are strong months for new home sales.
Regionally, and on an annual basis, new home sales increased 7.5% in the South and 3.4% in the West but sank 13.3% in the Northeast and 3.2% in the Midwest.
The median sales price of new, single-family home sold in May was $308,000.
The average sales price was $377,200.
As of the end of the month there were about 333,000 new homes available for sale – about 6.4-month supply at the current sales rate.
Greg Ugalde, chairman of NAHB, says the report “shows growth in sales in the $200,000-300,000 price range, which indicates middle-class demand for housing is being supported by low rates and solid employment.”