New Home Sales Dropped This Much in May
The U.S. Department of Commerce released their new home sales data for May 2011 this morning. Try to suppress your excitement. Here’s your Cheat Sheet:
Sales: Sales of new single-family houses in May 2011 were at a seasonally adjusted annual rate of 319,000.
Month-over-Month Change: This is 2.1% below the revised April 2011 rate of 326,000.
Year-over-Year Change: This is 13.5% above the May 2010 estimate of 281,000.
Prices: The median sales price of new houses sold in May 2011 was $222,600 up from $217,900 in April; the average sales price was $266,400. The seasonally adjusted estimate of new houses for sale at the end of May was 166,000.
Inventory: This represents a supply of 6.2 months at the current sales rate, down from 6.5 in April. A nice improvement for the moment.
Commentary: The year-over-year change can be misleading, implying more improvement than has been made. In April, home sales were significantly down year-over-year, but were still higher than May’s current levels. The reason for such a large year-over-year change in May is that May 2010 witnessed a huge drop in sales compared to April 2010. Given the sudden drop in sales in May 2010, looking at the current month-over-month change is a more accurate indicator of growth, or in this case, lack thereof.
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