US new home sales fell sharply in May, economists say 'boom' over
New home sales in the US fell sharply last month as the boom in demand for living in the suburbs in the wake of Covid-19 ebbed.
According to the Department of Commerce, in seasonally adjusted terms, the annualised pace of new home sales fell at a month-on-month pace of 5.9% to reach 769,000.
That was substantially below the 875,000 unit pace forecast by economists.
As well, readings for February, March and April were all revised lower, although the pace of new home sales in May was 9.2% above its year earlier level.
The supply of homes available for sale on the other hand rose to the equivalent of 5.1 months' worth of sales, up from 4.6 months in April.
Prices also rose, with the median cost of a new home increasing from $365,300 in April to $374,400 and the average price improving from $420,900 to $430,600.
"The story here, we think, is simply that demand in the suburbs has fallen as Covid fear has faded," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"[...] Prices continue to rise rapidly, especially on a y/y basis, given the anniversary of the Covid hit from last year, but we expect much slower increases over the second half. The brief, albeit frenetic, boom phase of the housing recovery is over."