New home sales in the South took an unexpected nosedive in May, with the most significant declines seen in the South, according to the latest report from the Census Bureau.
- Sales of new single-family houses in the South fell to a seasonally adjusted annual rate of 368,000, marking a 12% drop from April, and is now at the lowest since February.
- Despite the decline, the South still makes uo 59.4% of new home sales.
Nationally: New home sales dropped to 619,000 in May, representing an 11.3% decrease from April. This decline brings the sales rate to its lowest level since November 2023. The sharp fall contrasts sharply with economists’ predictions, who had forecasted a 2.5% increase in new home sales for May.
- All four regions of the U.S. experienced a decline in new home sales during May, indicating a widespread slowdown in the market.
Price Decline: The national median sales price of new houses sold in May was $417,400, down just 0.1% from April. However, this slight decrease brings the median price to its lowest level since January 2023.
14-Year Low: The inventory of new houses for sale at the end of May saw a slight increase. The seasonally adjusted estimate was 481,000, up 1.5% from April and the highest level since January 2008.
- This increase in inventory represents a supply of 9.3 months at the current sales rate, the highest level since October 2022.
Bottom Line: The unexpected drop in new home sales could signal broader economic challenges or shifts in buyer behavior. It will be crucial to monitor the coming months to understand whether this trend continues or stabilizes, as it could have significant implications for the housing market and the broader economy.
