Key Takeaways from the May New Home Sales Report

• May new home sales fell 6 percent from April to 551,000 units (SAAR), according to the Census Bureau.
• April home sales were revised downward from 619,000 units to 586,000 units (SAAR) and March sales were revised down from 531,000 units to 522,000 units (SAAR). Instead of surging 16.6 percent as initially reported, new home sales increased 12.3 percent in April.
• Inventory of new homes for sale continued to gradually ease, growing 1.2 percent over the month.
• The median price of new homes sold fell 9.6 percent from April to $290,100, retreating from an all-time high to a 12-month low in May.

May new home sales fell 6 percent from April, to 551,000 units at a seasonally adjusted annual rate (SAAR), in line with expectations (figure 1). Compared to a year ago, May new home sales were up 8.7 percent.

April new home sales were revised downward from an initially reported 619,000 units to 586,000 units. Rather than increasing at a record monthly pace of 16.6 percent in April as first reported, revised data suggest that home sales increased by 12.3 percent in April – in line with recent trends. March home sales were also revised lower.

May’s month-over-month slowdown was most prominent in the Northeast and West. In the Northeast, new home sales surged 41.7 percent in April but fell 33.3 percent in May (off of very low numbers). In the West, new home sales increased 19.5 percent in April only to fall 15.65 percent in May. The Midwest bucked the national trend, falling 4.6 percent in April from March but rising 12.9 percent in May over April. Over the year, May new home sales were up 30.8 percent in the Northeast (again, off of low numbers), up 16.7 percent in the Midwest, up 13.3 percent in the South and down 8.8 percent in the West. During mid-2015, new home sales were consistently stronger in the West than elsewhere in the nation, though the region now appears to be lagging.

Inventory of new homes continued to ease gradually in May, with the number of new homes for sale growing 1.2 percent from April to 244,000 units (SAAR). Compared to last year, the number of new homes on the market in May was up 16.2 percent, or roughly 34,000 homes.

After hitting a new all-time high in April, the median seasonally-adjusted price of new homes sold retreated to a 12-month low in May, falling 9.6 percent from April to $290,100. The median price of new homes sold in May was 1.05 percent above the median sale price recorded in May 2015.