New home sales climbed 6.7 percent month-over-month to a seasonally adjusted total of 689,000 in May, according to the latest data released Monday by the U.S. Census Bureau and the United States Department of Housing and Urban Development (HUD). Year-over-year sales rose 14.1 percent.
The median sales price for a new home in May 2018 was $313,000 – the median price for all sales was $368,500. The median price was the lowest since April 2017, said Tendayi Kapfidze, LendingTree’s chief economist.
“The share of sales over $500,000 was 15 percent, the lowest since February 2015,” Kapfidze added. “The decline in the median sales prices and share of higher priced homes come despite reported increases in the cost of inputs like lumber and washing machines due to tariffs.”
At the end of the month, there was a seasonally-adjusted 299,000 new homes for sale, which represents a 5.2-month supply of inventory at the current sales rate. Tariffs could put a greater strain on inventory down the road too, according to Kapfidze.
“We had previously expected the tax cuts to improve builder margins by 10percent to 15 percent, which we anticipated may have led builders to consider increasing activity at the lower-end of the market where inventory challenges are particularly acute,” Kapfidze said. “The tariffs may negate this benefit.”