New home sales in May rose 12.2% from April, marking the third consecutive month of growth.
Sales of new single-family homes rose at a seasonally-adjusted annual rate of 763,000, according to estimates released Tuesday jointly by the Federal Reserve. US Census Bureau and Department of Housing and Urban Development, This is up 20% from the May 2022 forecast of 636,000.
Homebuilders’ confidence has been rising over the past few months, and housing starts have increased by 21.7% since April. Strong new home sales have put the new construction industry back on track to provide much-needed inventory for this under-supplied market. They now supply about 30% of the residential sales market.
“As buyers looking for listings and affordability—both of which can be found in new construction—many builders are offering incentives and refreshed inventory this spring shopping season,” he said. Zillow senior economist Nicole Bachaud said in a statement. ‘This has led to a resurgence in the new construction industry, with sales rising and home builders’ confidence rising.’
The new home market stands in stark contrast to the current re-sales market, which has been battered by record-low inventory and high listing prices. Still, Zillow economists said, there are signs that the current home sales market is growing.
The median sale price for new homes sold in May 2023 was $416,300, while the median sale price for existing home sales was $396,100. The median sale price for new homes was $487,300.
The seasonally adjusted estimate of new homes for sale at the end of May was 428,000. This represents 6.7 months’ supply at the current selling rate.
Economists said demand has been resilient as people have become accustomed to interest rates in the 6%-7% range and existing inventories remain tight. These factors are making new homes more visible on the market, while homeowners who want to trade in are being attracted by new floor plans, more technology, as well as higher efficiency, said chief economist George Ratiu. Keeping up to date
