Housing

New Home Sales at 2-year High

The US Census Bureau reported this morning that new home sales for the month of May reached a seasonally adjusted annual total of 369,000, much better than the April total of 343,000 and even stronger than the consensus estimate of 348,000.

The total inventory of new homes available for sale at the end of May also fell to a 12-month low of 4.7 months. In January 2009, the supply of new homes for sale totaled 12.1 months, an all-time record. An inventory total of less than 6 months supply is normal.

New home sales have averaged 353,000 over the first 5 months of this year, up from under 300,000 in the previous 18 months. On a non-seasonally adjusted basis, 35,000 new homes were sold in May, up from just 28,000 a year ago.

The largest number of homes sold in May came in the $200,000-$299,000 price range, followed by homes in the $150,000-$199,000 price range.

Overall, what we’re seeing is a housing market that has bounced off a bottom and is recovering. The recovery creeps along, but it makes steady progress.

Paul Ausick

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