Sales of new single-family homes rose to 696,000, up 10.7 percent year-on-year from a seasonally adjusted annual rate of 629,000 in April. May profit followed a 12.0 percent fall in April, a 9.5 percent fall in March, a 4.9 percent fall in February and a 1.0 percent fall in January. Despite gains in May, sales fell 5.9 percent from a year earlier to a four-month low (see first chart). Meanwhile, the 30-year fixed mortgage rate was 5.25 percent at the end of May, rising sharply from a low of 2.65 percent in January 2021. The rate reached 5.81 percent at the end of June, suggesting that housing headaches continue. Power (see first chart).
Sales of new single-family homes increased in May in two of the four regions of the country. Sales in the South, the largest by volume, rose 12.8 percent, while sales in the West rose 39.3 percent. However, sales in the Midwest fell 18.3 percent, and sales in the Northeast, the smallest region in terms of volume, fell 51.1 percent a month. In the last 12 months, sales were down 42.5 percent in the Northeast and 37.0 percent in the Midwest, but increased 0.5 percent in the West and 1.5 percent in the South (see Chart 2).
The median selling price of a new single-family home was $ 449,000 (see third chart), down from $ 454,700 in May (not seasonally adjusted). One-year-old profit was 15.0 percent vs. 20.7 percent 12-month profit in April. On a 12-month average, average single-family home prices are still at record highs.
Total inventory of new single-family homes for sale rose 1.6 percent to 444,000 in May, putting monthly supply (inventory 12 divided by annual sales rate) at 7.7, down 7.2 percent from April but still up 42.6 percent year-over-year (previous level). See the fourth chart). The monthly supply is much higher based on historical comparisons (see Chart 4). Higher prices, improved monthly supply, and mortgage rate increases should weigh on housing activity in the coming months and quarters. However, the median time to market for a new home was very low in May, coming in at 3.1 vs. 2.4 months in April.