New home sales in the U.S. rose by more than expected in May, posting the strongest sales rate in over two years, according to figures released by the Commerce Department on Monday.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000.
With the bigger than expected increase, new home sales came in at their strongest rate since April of 2010.
Perhaps contributing to the strong growth in sales, the median sales price of a new single-family home dipped to $234,500 from the April median of $236,000, a 0.6 percent decline.
Fueling the nationwide increase in new home sales was a 12.7 percent increase in sales rate in the South, the nation's largest housing market.
The report also showed a 36.7 percent increase in new home sales in the Northeast, which is presently the smallest of the four regions defined by the Commerce Department.
In the Western region, new home sales dipped slightly, falling by 3.5 percent, while the Midwest saw a steeper 10.6 percent decline.
Compared to 2011 figures, new home sales nationwide are up 19.9 percent, while the median sales price is up 5.6 percent.
The seasonally adjusted estimate of new houses for sale at the end of May was 145,000, representing a supply of 4.7 months at the present sales rate.
Last Thursday, the National Association of Realtors released a report showing a slightly bigger than expected drop in U.S. existing home sales in the month of May.
NAR said existing home sales fell by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists had expected a slightly more modest decrease to an annual rate of 4.57 million.
Wednesday morning, NAR is due to release a separate report on pending home sales in May. Economists expect a 1.2 percent increase in pending home sales.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
by RTT Staff Writer
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