New single-family home sales fell to a record low in May, sinking an estimated 32.7 percent from April’s upwardly revised rate of 446,000 and dropping 18.3 percent from the May 2009 rate, according to a report by the U.S. Census Bureau and the Department of Housing and Urban Development.
That record low, a seasonally adjusted annual rate of 300,000 sales, comes after new-home sales jumped 30.8 percent year-over-year in April. The previous record low occurred in September 1981, when the seasonally adjusted home sales rate dropped to 338,000. The bureau’s historical sales records date back to January 1963.
"New-home sales are counted when the contract is signed, so the tax credit-related pickup in sales activity happened in April. This pulled demand forward, and April was probably the peak for new-home sales this year," stated a post at Calculated Risk, a financial and housing blog. In order for buyers to be eligible for the tax credit, homes had to be under contract by April 30.
Regionally, the West was hit hardest by the drop: the seasonally adjusted annual sales rate fell 53.2 percent month-to-month and 43.3 percent year-over-year. The South also saw drops: 25.4 percent month-to-month and 16.7 percent year-over-year.
Numbers for the Northeast and Midwest were somewhat rosier; both regions saw year-over-year increases: 12 percent and 6.3 percent, respectively. But both experienced month-to-month sales declines of 33.3 percent and 23.9 percent, respectively.
The non-seasonally adjusted sales rate for May was an estimated 28,000. The vast majority of homes (73 percent) sold for less than $300,000, about the same as in May 2009. Half sold for less than $200,000, compared with 40 percent in May of last year.
The median price for May was $200,900; the average was price was $263,400, according to the report.
The seasonally adjusted inventory estimate of houses for sale at the end of May was 213,000 — a supply of 8.5 months at the current sales pace, the report said. That’s a 70 percent jump from April’s estimated supply of five months. Six months represents a rough equilibrium between a seller’s market and a buyer’s market.
According to figures released by the National Association of Realtors on Tuesday, existing-home sales were up 19.2 percent year-over-year in May, a rise the association attributed to the homebuyer tax credits. But sales were down 2.2 percent from the prior month.
A separate NAR index, which gauges pending sales of existing homes, is based on sales contracts signed but not yet closed. That index rose for the third straight month in April, increasing 6 percent month-to-month and 22.4 percent year-over year.
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