The month of May saw a record number of new-home purchases. Sales of newly built single-family homes increased 6.7 percent in May to a seasonally adjusted annual rate of 689,000 units, the Commerce Department reported Monday. It marks the highest number of new-home sales of the year and the second highest in sales 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,” says Randy Noel, chairman of the National Association of Home Builders.
The inventory of new homes for sale was 299,000 in May—a 5.2-month supply at the current sales pace. The median sales price for a new home last month was $313,000.
“We saw a shift to more moderately priced home sales this month, which is an encouraging sign for newcomers to the market,” says Michael Neal, the NAHB’s senior economist. “Since the end of the Great Recession, inventory has tracked the pace of sales growth. While we expect continued gains in single-family housing production, inventory may be partially constrained by ongoing price increases for lumber and other construction materials.”
New-home sales posted the largest increase in the South last month, rising 17.9 percent month over month and reaching a postrecession high. Sales remained unchanged in the Midwest, while sales fell 10 percent in the Northeast and 8.7 percent in the West.
