USA Today
WASHINGTON (AP) — Sales of new homes rose in May, surprising economists who had been forecasting that housing would slow because of rising mortgage rates.
The Commerce Department reported that sales of new single-family homes increased 4.6% in May to a seasonally adjusted annual rate of 1.234 million units.
Economists polled by Reuters were expecting sales of new homes to slow in May to a 1.150 million unit pace from an originally reported 1.198 million unit rate in April.
Compared with a year earlier, the May sales pace was down 5.9%.
Median selling prices fell 4.3% from April to $235,300, a figure that was still 3.1% above the year-ago median price of $228,300.
The closely watched supply of new homes for sale at the end of May fell 0.7% to 556,000, from a downwardly revised 560,000 in April, which was a record level.
The homes for sale figure represented a 5.5 months’ supply at the current sales pace, compared to a 5.8 months’ inventory in April.
May new single-family home sales in the U.S. Northeast fell 7.9% to an annual pace of 58,000, the slowest rate since July 2004. In the South, sales climbed 6.0% to an annual rate of 669,000 units while in the West, sales rose 5.3% to a pace of 317,000 units. In the Midwest, sales edged up 2.7% to a pace of 190,000 units.
Analysts are still looking for sales of both new and existing homes to fall around 10% this year as rising mortgage rates crimp demand. The lowest mortgage rates in four decades helped to propel sales to five straight annual records.