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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