WASHINGTON (6/25/14)--New single-family home sales soared above expectations in May, rising 18.6% from April levels and posting their quickest pace since mid-2008, according U.S. Census Bureau numbers released Tuesday.
While new-home sales numbers are volatile, and often revised, analysts still put at least some stock in the initial reading of a 504,000 annual rate gain, as recent months have produced much weaker results (Economy.com June 24).
The largest jump came in the Northeast, which saw its sales skyrocket by 54.5% after a dismal start to the year. The region has increased its new-home sales pace by 36.6% since this time last year.
In the South and West, sales have jumped 12% and 33% year-over-year respectively, with the Midwest as the only region not to post healthy gains.
While inventories of new single-family homes climbed 17% in May year-over-year, inventories were left unchanged from April, pushing down supply, tightening the market and pressing upward on home prices, which according to several other reports released Tuesday, had slowed in April.
Among those reports, the Federal Housing Finance Agency reported Tuesday that four of nine census regions posted declines in home prices in April, when sales activity had bottomed out after a sluggish first quarter.
Annual increases recorded by the S&P/Case-Shiller Home Price index slowed in April by nearly 2 percentage points as well.
But with the uptick in sales in May, the median sales price for a new single-family home jumped 7% year-over-year to $282,000, according to Moody's.
Though, "the share of homes sold above the median price has increased 2 percentage points since last May, which accounts for some of the increase in the media house price," Moody's analyst Celia Chen said (Economy.com).