U.S. May New Home Sales - Weaker but April revised up
May’s 619k total for new home sales is a little weaker than expected, but the 11.3% fall from April is sharp given that April was revised to 698k from 634k and leaves the net total higher than expected. We do however believe that trend in home sales is starting to move lower.
April’s revised number is the highest since July 2023 while the May number is the lowest since November 2023. Underlying trend appears marginally negative over the past year but with plenty of volatility, with April’s strength moving above trend.
That May is weaker could be corrective, and as April’s data shows could still see a significant revision. However the May dip is consistent with signals from the NAHB homebuilders’ survey which also suggests further slippage in June. Housing starts and permits also weakened in May.
Price data was mixed with the median down by 0.1% on the month and down by 0.9% yr/yr while the average rose by 3.2% on the month fir a 4.9% yr/yr increase. The median is trending near zero on a yr/yr basis while the average has seen five straight moderately positive yr/yr outcomes.
