WASHINGTON—New home sales decreased 7.8% from April's upwardly-revised 679,000 annualized units. NAFCU Research Assistant Dhruv Singh attributed the plunging figure to the rising impact of tariffs on material costs.
"Average monthly sales through May are 3.7% lower than the average over the first five months of 2018," Singh said. "The housing market continues to sag despite low mortgage rates and a supportive labor market. Homebuilder sentiment is down from its late-2017 peak, but remains elevated.
"Fresh concerns over the impact of tariffs on materials costs weighed on the June index, however. Overall, NAFCU expects home sales to remain relatively flat through the rest of 2019," Singh added.
Sales increased in two of the four regions from a year ago: Sales in the Midwest increased 2.4%, followed by the South (+1.3%). The West posted a decline of 17.2% compared to a year ago, followed by the Northeast (-15.2%).
Based on current month sales, there were 6.4 months of supply in May, up from 5.9 months in April. The number of unsold homes left on the market grew from 325,000 to 332,000 units. This represents an 11% increase from a year ago, Singh said.