Last Update: 02-Jul-15 16:52 ET
New Home Sales
- New home sales increased 2.2% in May to 546,000 from an upwardly revised 534,000 (from 517,000) in April. The Briefing.com Consensus pegged new home sales at 525,000.
- That was the most new homes sold since February 2008.
- New home sales are measured by signed contracts and not actual closing. Buyers likely took notice of the increase in 10-year Treasury yields that began at the very end of April. With mortgage rates heading higher, buyers signed contracts to take advantage of relatively low interest rates.
- A similar bump in sales is likely to be reported in the June existing home sales report.
- Regionally, there was a big disparity in demand trends. Nearly the entire increase in sales came from an 87.5% increase in sales in the Northeast. Sales in the Midwest (-5.7%) and South (-4.3%) declined on a month-to-month basis. Sales in the West increased 13.1% to 138,000, but remain below January levels.
- Total supply was unchanged at 206,000. The increase in sales reduced the months’ supply at the current sales rate to 4.5 months from 4.6 months in April. A healthy market typically has 6.0 months of supply. Builders will need to increase their production if they are going to get inventories back to their normal and healthy range.
- The median home sales price declined 1.0% y/y to $282,800. That was the first year-over-year decline in prices since a 3.1% drop in September 2014.
- New home demand has accelerated from 2013 and 2014 levels.
|Median Price Y/Y