Sales of new U.S. homes dropped unexpectedly in May as elevated home prices weigh on affordability.
Purchases of new single-family homes fell 5.9% to a 769,000 annualized pace after an downwardly revised 817,000 in April, government data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a 865,000 rate.
Shipping bottlenecks and higher input prices have held back homebuilding, contributing to skyrocketing prices for the limited supply of homes available. A silver lining of the report was data showing new-housing inventory continued to increase.
There were 330,000 new homes for sale in May, the most since July 2019. At the current sales pace, it would take 5.1 months to exhaust the supply of new homes, compared with 4.6 months in the prior month.
The median sales price rose to a record $374,400.
The number of homes sold in May and awaiting the start of construction — a measure of backlogs — was little changed from a month earlier at 276,000, Wednesday’s report showed. The total number of homes sold with construction underway eased to 305,000 in May.
A separate report Tuesday showed that
Digging Deeper
- Sales across U.S. regions were mixed, with the Midwest seeing no change and the South posting a decline.
Home sales in the Northeast showed a large increase - New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close
- The new-homes data are volatile; the report showed 90% confidence that the change in sales ranged from a 24.5% decline to a 12.7% increase
