The housing market experienced a significant surge in May 2023, as newly released data from the U.S. Census Bureau and the Department of Housing and Urban Development unveiled remarkable figures. Sales of new single-family houses skyrocketed to an impressive seasonally adjusted annual rate of 763,000, marking a substantial 12.2% increase from the revised April rate of 680,000. This exceptional growth also represents a staggering 20.0% rise compared to the May 2022 estimate of 636,000 units.
Additionally, the median sales price for new houses sold in May 2023 stood at $416,300, while the average sales price reached $487,300. The report also reveals that the supply of new houses available for sale at the end of May was estimated to be 428,000. This represents a 6.7-month supply at the current sales rate, indicating a balanced market for prospective homebuyers.
Image: U.S. Census Bureau
The National Association of Home Builders (NAHB) has identified a contributing factor to this surge in sales as the lack of existing inventory. The existing single-family home market currently faces a scarcity, with only a 3-month supply available. Comparatively, the inventory of new homes constituted 31% of the total inventory in May, surpassing historical levels typically ranging from 10% to 15%.
Consequently, the pace of resales has experienced a decline of 20% from the previous year. In contrast, the rate of new home sales has surged by 20% from a year ago.
Meanwhile, the mortgage rates continue to decline, the 30-year fixed-rate mortgage averages 6.67% last week, according to results of Freddie Mac’s Primary Mortgage Market Survey.