New Home Sales in West Plummet, Skewing National Totals

It was another disappointing month for new home sales, but due entirely to a sharp decline in those sales in the West. The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes in May were at a seasonally adjusted annual rate of 626,000 units.  This is 7.8 percent below the revised (from 673,000) April rate of 679,000 and 3.7 percent lower than the rate in May 2018 of 650,000

Expectations were for a rebound from April sales after a 6.9 percent downturn from March.  Analysts polled by Econoday were looking for results in a range from 649,000 to 710,000 with a consensus of 680,000.

On a non-adjusted basis there were 60,000 newly constructed homes sold in May compared to 67,000 in April.  On a year-to-date basis, sales are up 4.0 percent at a total of 302,000.  At the same point in 2018 sales had totaled 291,000.

At least inventories have improved.  There were 333,000 homes for sale at the end of May, a slight increase from the 332,000 available the previous month, but slowing sales pushed the months' supply number from 5.9 months to 6.4 months.  A year earlier there was a 5.6-month supply.

The median price of a home sold in May was $308,000 and the average was $377,200.  In May 2018 the respective numbers were $316,700 and $372,600.

Sales in the Northeast were up 17.6 percent from April and 15.2 percent year-over-year.  There were 6.3 percent and 2.4 percent gains respectively in the Midwest and the South saw increases of 4.9 percent and 1.3 percent.  The West countered all of those positive numbers with a 35.9 percent nosedive in sales compared to April and a 17.2 percent loss on an annual basis.