Dive Brief:
- New single-family home sales dropped 6.0% between April and May to an annual rate of 551,000, the Commerce Department reported Thursday. Despite the dip, May's rate was still 8.7% above the rate of new home sales in May 2015.
- The median sales price of new homes sold in May was $290,400, down from $321,100 in April.
- All major U.S. regions saw new home sales decline last month, with the exception of the Midwest, were sales increased 12.9%. Sales dipped 33.3% in the Northeast, 15.6% in the West, and 0.9% in the South.
Dive Insight:
New home sales, which represent approximately 10% of all home sales, didn't meet expectations, as economists surveyed by Reuters forecast a 560,000 pace. In its report, the Commerce Department also revised April's results down from a 619,000 rate to 586,000.
Housing experts emphasized that initial new home sales data is volatile and often revised — as evidenced by April's downward revision. Economists considered the unexpectedly strong pace of new home sales in April "unsustainable," and said the dip last month gives a better indication of the current trend of a slowly strengthening housing market, according to CNBC.
Before the dip in new home sales, housing reports this month had been mostly positive. Builder confidence rose two points to a score of 60, housing starts slipped only 0.3% last month after a major boost in April, and existing home sales grew 1.8% to a nine-year high. Pending home sales data released next Wednesday will round out this month's string of housing reports.
