Home sales roar back in May after April showers

After declining in April US new home sales rebounded in May while the median price surged 11.5% to a record $345,800. Sales of existing homes also have been on the rise

The new home sales rose 2.9 percent sequentially to 610k, as compared with consensus expectations of 590k.

Bottom line, while the timing of these data points in terms of activity are not uniform, we've seen softer housing starts, a slight moderation in builder sentiment, better than expected closings of existing homes, purchase applications for a mortgage just shy of the highest level since mid 2010 and better pace of new home sales year to date. May's sales increase came after April's sales were revised to show a smaller drop than previously reported.

Sales of new homes rebounded in May, led by strong sales gains in the South and West, the Commerce Department reported Friday.

"The name of the housing market game over the past few years has been low supply, not low demand", said Ralph McLaughlin, chief economist at Trulia.

The May sales pace was the third strongest of the year, but lower than the exceptionally strong March reading of 644,000 and February's 615,000.




So far in 2017, 271,000 new homes have been sold, which is 12% higher than during the same period a year ago.

"The pressure to close deals quickly, which has afflicted the existing home sales market, is also seeping into the market for new homes", Ms. Gudell said.

Regionally, new home sales increased 13.3 percent in the West and 6.2 percent in the South. Sales fell 10.8 percent in the Northeast and 25.7 percent in the Midwest.

The median house price rose to $345,800 in May from $310,200 in the prior month.

However, higher costs for building materials and shortages of lots and labor have restricted home building, and, with demand outstripping supply, house prices are still high in the States. April's sales pace was revised up to 593,000 units. The months of supply was unchanged from April.

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