What New Home Sales Tell About US Economy

New Home Sales in the US rebounded sharply in May. The data published by the US Census Bureau showed on Friday that New Home Sales in the US rose by 10.7% in May to a seasonally-adjusted rate of 696,000 following April’s shrinkage of 12% (revised from -16.6%).

“The median sales price of new houses sold in May 2022 was $449,000,” the Commerce Department said, adding that “the average sales price was $511,400.”

Risk flows continue to dominate the markets after this data. The Dow Jones Industrial Average and the S&P 500 indexes were up 1.9% and 2.2%, respectively. both Indexes were sharply higher in early trading on Friday. The yield on the 10-year Treasury note, 3.131% inched down to 3.08%.

Analysts forecast new home sales to come in at 587,000 in May from the initial estimate of 591,000. Year-over-year, new home sales are down 5.9%.

Despite the higher sales numbers, the housing sector is in the midst of a slowdown, with mortgage rates soaring past 5.8% for a 30-year fixed-rate mortgage, according to Freddie Mac. Inventory remains tight with the number of homes on the market. The data are often sharply revised. April new home sales initially stood at 591,000, now revised to 629,000.