Another Strong Report Details Economic Recovery in May
Sales of new homes rose 16.6 percent in May with the reopening of major parts of the country fueling activity in the housing market.
The Commerce Department reported Tuesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 676,000 last month.
That was a much better performance than expected. Many economists had forecast that sales would fall in May.
There are hopes that the housing slump that occurred with the shutdowns could be coming to an end.
Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said she expected a modest recovery in sales in coming months following the big declines in the first quarter, but she still expects a decline overall this year.
“The slow recovery in the labor market will limit the upside of any rebound in the housing market,” she said.
The median price of a new home rose 4.9 percent to $317,900 in May after falling by 8.7 percent in April, a drop that was attributed to heavy discounting by builders in the midst of the coronavirus shutdowns.
The big sales rebound left activity in May 12.7 percent higher than a year ago.
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