Sales of new homes tanked in May, pushing supply to a 3-year high

Sales of new single-family homes dropped 13.7% in May compared with April to 623,000 units on a seasonally adjusted, annualized basis, according to the U.S.

Sales of new single-family homes dropped 13.7% in May compared with April to 623,000 units on a seasonally adjusted, annualized basis, according to the U.S. Census.

That sales total was 6.3% lower than May 2024 and well below both the six-month average of 671,000 and the one-year average of 676,000. It also lags the pre-pandemic average in 2019 of 685,000 units sold.

Wall Street analysts were expecting May new home sales of 695,000, according to estimates from Dow Jones.

This count is based on signed contracts, so people out shopping in May, when mortgage rates remained stubbornly high.

The average rate on the 30-year fixed mortgage started May at 6.83%, rose steadily to just over 7% and then settled back at 6.95% by the end of the month, according to Mortgage News Daily.