US new home sales drop at sharpest rate in three years

(Sharecast News) - New home sales in the United States plunged in May by their most in nearly three years as elevated mortgage rates dampened affordability levels among buyers. Data from the Commerce Department on Wednesday showed the sales of new single-family houses totalled just 623,000 last month, down 13.7% after growing by 9.6% in April.

This was down from the 722,000 reported the previous month and well below the consensus forecast of 690,000. Compared with May 2024, new home sales were down 6.3%.

This was also the lowest level of new home sales since October and the biggest monthly drop since June 2022.

In terms of supply, the number of new houses for sale at the end of the month was 507,000, up 1.4% over April's figures and 8.1% higher than May 2024. As such, the housing market has a supply of 9.8 months at the current sales rate, up from 8.3 months in April.

Meanwhile, the median sales price of new houses sold grew 3.7% over the month to $426,600, while the average sales price rose 2.2% to $522,200.