Contracts for new, single-family home sales in the US declined to a 626,000 seasonally adjusted annual rate in May according to estimates from the joint release of HUD and the Census Bureau Tuesday. This was a surprising drop due to recent softening of mortgage interest rates and continued low unemployment. Recent months’ data have been relatively positive, with the revised March pace of 705,000 being the second highest since the Great Recession.
The decline in May is off recent trends. However, for the first five months of the year, US new home sales are +4% ahead of the sales pace of the initial five months of 2018. These gains have distinct regional clustering. Year-to-date sales are up 7.5% in the South and 3.4% in the West (concentrated in the Mountain states), while showing a 3.2% decline in the weather-affected Midwest and a 13.3% decline in the Northeast.
Contracts for new, single-family home sales declined to a 626,000 seasonally adjusted annual rate in May according to estimates from the joint release of HUD and the Census Bureau.
Sales in May were down -3.7% year-over-year compared to May 2018. Year-to-date (just through May), sales are up +4% compared to the same period in 2018.
The “distressing gap” graph shows existing home sales (left axis) and new home sales (right axis) through May 2019. This graph starts in 1994, but the relationship had been fairly steady back to the ’60s. Following the housing bubble and bust, the “distressing gap” appeared mostly due to distressed sales. Read more at https://www.calculatedriskblog.com/#P6OEIOmUhyC3LPZZ.99