New homes sales rebounded 2.9 percent in May

At the current sales pace, there was a 5.3 months' supply of new homes on the market in May, a relatively low level. Sales of previously owned homes also rose last month.

New U.S. single-family home sales rose in May and the median sales price surged to an all-time high, suggesting the housing market had regained momentum.

Sales of new homes rebounded in May, led by strong sales gains in the South and West, the Commerce Department reported Friday.

Newly released federal data reaffirmed the continued strength of the housing market.

NAR said existing home sales climbed by 1.1% to an annual rate of 5.62 million in May after tumbling by 2.5% to a downwardly revised 5.56 million in April.

The numbers followed an industry report this week showing a jump in sales and prices for existing homes, and were sure to fuel worries that homes could soon become unaffordable for many, with prices outstripping inflation and wage gains.

The average sales price also reached its highest amount ever, rising 10.5 percent to $406,400, the report said.

The median house price rose to a record high of $345,800 in May, from $310,200 in the prior month. The unemployment rate fell to a 16-year low of 4.3 percent in May and mortgage rates are still favorable by historical standards. Housing starts declined for the third straight month in May, as builders expressed concern about tight availability of lots and a labor shortage. U.S. stocks were trading modestly higher while prices of U.S. Treasuries edged up.

The number of homes for sale rose by 1.5 percent in May to 268,000, meaning there was a 5.3 month's worth of supply if the pace of sales seen in May were to continue.

Sales in the South and the West drove the monthly gains, with the Northeast and Midwest of the country instead seeing declines for the second month in a row. The months of supply was unchanged from April.

  • Zachary Reyes