New-home sales rose back in May to an estimated rate of 676,000, according to the U.S. Census Bureau.
This represents a 16.6% increase of April’s 580,000 and 12.7% above May 2019’s 600,000. The median sales price of new homes sold in May 2020 was $317,900 and the average sales price was $368,800.
For-sale inventory and month’s supply of new homes at the end of May was 318,000—representing a supply of 5.6 months at the current sales rate.
Holden Lewis, Home and Mortgage Specialist, NerdWallet, said May 2020’s data is the strongest for the month since 2007.
“Despite stay-home orders and high unemployment, people were out there, buying newly constructed homes. Prices have rebounded after a short dip, and 45% of new home sales in May were for homes costing less than $300,000, compared to a 48% share in April,” he said.
Realtor.com’s Chief Economist Danielle Hale said new home sales are benefiting from the limited availability of existing homes, coupled with homebuyer demand and renewed interest in the suburbs.
“The jump in new home sales is a nice indicator of what's to come because it's based on contract signings, a somewhat early stage of the homebuying process,” she said. “A similar surge in next week's pending home sales, which cover the much larger existing homes market, will be good confirmation that the low point in home sales is likely behind us."
The National Association of Realtors (NAR) reported that May’s existing-home sales took a hit, falling 9.7% in May.
May’s total sales overall year-over-year also dipped—falling 26.6% from May 2019’s 5.53 million.
According to the NAR, it was the Northeastern portion of the nation that was hit the hardest, experiencing the greatest decline in month-over-month sales numbers.
NAR’s Chief Economist Lawrence Yun commented on the disappointing numbers while offering some hope for a future rebound: “Sales completed in May reflect contract signings in March and April—during the strictest times of the pandemic lockdown and hence the cyclical low point. Home sales will surely rise in the upcoming months with the economy reopening and could even surpass one-year-ago figures in the second half of the year.”
The Census Bureau will release June numbers on July 24.