WASHINGTON — Sales of new U.S. homes slumped 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.
The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen 3.7% compared with the same period in 2018.
Lower mortgage rates and a healthy job market have yet to unleash more home-buying. Sales of new homes plummeted 35.9% in the West and 17.6% in the Northeast. New-home sales rose 4.9% in the South and 6.3% in the Midwest, which are generally more affordable markets.
The median sales price of a new home fell 2.7% from a year ago to $308,000.
The data add to housing indicators showing a mixed outlook in recent months.
Sales of existing homes — which are the bulk of the market — rebounded in May. They increased 2.5% to a seasonally adjusted annual rate of 5.34 million, evidence that lower mortgage rates might ultimately improve buying.
Sales of existing homes fell last year as mortgage rates climbed to 5%, but sales appear to have leveled off this spring. Borrowing costs have fallen back below 4%, which has enabled more would-be buyers to afford homes. Prices are now increasing more slowly than wages, which also helps affordability.
Still, sales of existing homes remained 1.1% lower than a year earlier.
The number of properties sold for which construction hadn’t yet started eased slightly to 195,000, indicating potential buyers still have ample supply in the pipeline. The number of new homes for sale at the end of the month was little changed at 333,000.
The supply of homes at the current sales rate increased to 6.4 months from 5.9 months