New home sales slumped in May

The number of new homes sold in May dropped 3.7% below last year's level and fell 7.8% from April

The number of new homes sold took a nosedive in May, falling 7.8 percent below April’s reported figure and 3.7 percent year-over-year, according to the latest data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

The median sales price of new homes sold was $308,000 and the average sales price was $377,200, according to the data released Tuesday. There was an estimated 6.4 months supply of new homes for sale at the end of the month, at the current sales rate.

“This new home sales data didn’t quite make the cut, and caps off another uncertain month for the housing market,” John Pataky, executive vice president at TIAA Bank said in a statement. “Across the market, the material decline in 30-year mortgage rates has pushed back against some of the negative trends we’ve seen such as land and labor shortages.”

“In the new home segment, though, it seems that not even lower rates could counteract the structural challenges,” Pataky added. “Unless there is a strong uptick in construction or a further drop in rates, the pattern of ‘two steps forward, one step back’ results we’ve seen in the new home market will carry on.”

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