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May New Home Sales Just Behind All-Time Record
Sales of new single-family homes in May climbed 2.1% to a seasonally adjusted annual rate of 1.298 million units, the U.S. Commerce Department reported last week, which was 4.4% higher than a year earlier and just behind the all-time record set last October.
“Home builders continue to see very strong demand for new homes and are striving to meet that demand despite serious supply constraints in some parts of the country,” said NAHB President David Wilson. “Our recent survey of builders indicated a high level of confidence in the market for the months ahead.”
“Positive economic and financial factors continue to drive sales of new homes,” said NAHB Chief Economist David Seiders. “Historically low mortgage rates, combined with good growth in household income and employment, have sales on track to set another annual record in 2005.”
Regionally, sales in May jumped 22.9% in the Midwest and rose 1.7% in the West. They dipped 0.8% in the South and tumbled 24.5% in the Northeast, following a 27% surge the month before.
The 442,000 inventory of new homes for sale represented a 4.2 months’ supply at the May sales pace.
“The inventory situation is quite healthy,” said Seiders. “Only 22% of the homes in the inventory are completed units, 57% are under construction and about 20% are units that have been permitted but not yet started — a historically high proportion. The level and structure of the inventory indicates that builders are working hard to keep up with very strong home buyer demand.”
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