ARLINGTON, Va.—New home sales increased 12.2% in May to 763,000 annualized units, while sales in April were revised down 3,000 units, according to new federal data.
Compared to 2022, May’s sales were 20% higher.
“New home sales heated up in May, growing for a third consecutive month and at the fastest pace in over a year,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The housing market looks to have found its floor and will continue to improve this year. Sales have been bolstered by the lack of existing home supply. While high interest rates have locked up the existing home market, builders have offered incentives to motivate a change in preferences to new construction. NAFCU expects residential investment to be a tailwind for economic growth in 2023 Q3.”
Based on current month sales, the new data show there were 6.7 months of supply in May, down 0.9 months from April. The number of unsold homes left on the market decreased 4,000 homes to 428,000. This represents a 19.2% decline from inventory levels a year ago.
Regionally, sales increased in the Northeast (17.6%), the West (17.4%), the South (11.3%) and the Midwest (4.1%).
Of note, the new home price, non-seasonally adjusted, rose 3.5% to $416,300 – 7.6% lower than a year prior, Long said.
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