New home sales surprised everyone by jumping double-digits in May, according to the Census Bureau and HUD…(Census Bureau)
M-O-M: Sales of new single‐family houses jumped 10.7% to a seasonally adjusted annual rate of 696,000 in May
Y-O-Y: New home sales are down 5.9% when compared to the same time one year ago.
SWING & A MISS: Economists had projected a 6.0% decline to a rate of 588k.
Regionally, the South continues its dominance with a 12.8% jump month-over-month to an annual rate of 413,000 which is 1.5% higher than one year ago…
- The West had the best month easily with a whopping 39.3% jump from April to a rate of 202k followed by the Midwest which fell 18.3% to 58k and the Northeast saw a dramatic 51.1% drop to 23k.
Not surprisingly, this jump in sales coincided with a drop in median and average prices for the month…
- The median price saw a slight thousand dollar drop to $449,000 in May.
- The average price though fell 10.3% to $511,400 in May.
Inventory levels were unchanged at 444,000, but because the pace of sales increased the monthly supply of homes fell from 9.0 months to 7.7 months.
This was a surprising report, to say the least. We all had pretty much accepted that the housing market is slowing and all reports going forward would reflect this decline. So what gives? Well, Ian Shepherdson Chief Economist at Pantheon Macroeconomics might have an answer…(Twitter)
- “Housing is still wrecked. You can safely ignore the reported 10.7% increase in May new home sales; the margin of error is – wait for it – +/-18.9%. The publication of these data on a monthly basis is pointless.”