May Residential Home Sales Beat Estimates

Sales of new single-family houses in May 2020 were at a seasonally adjusted annual rate of 676,000 per a Census report released Tuesday.

What Happened: The sales figure for new single family homes in May beat the consensus expectation for 600,000. 

New homes sold for an average price of $368,000 and a median price of $317,900.

May sales rebounded 15.5% from April sales. Sales from homes in the south make up over half of all the new home sales.

This could be in large part to industries and states reopening in the south, allowing construction to resume that was halted due to government coronavirus restrictions.

May 2020 sales were up 12.7% year-over-year.

Why It's Important: New home sales are good for the construction industry as well as for tax income for state and local tax income.

The total number of homes for sale at the end of May reached 318,000, which is the lowest number of the year so far.

In the coming months, it will be important to track whether new home sales increase.

With unemployment still hovering at around 13% nationwide and many still unsure of their financial future, people may be more inclined to stay put.

Yet new home sales could also be seeing a surge due to low interest rates. 

What's Next: Playing the waiting game. The next few months' numbers will tell the story.

As some major companies like Facebook, Inc. FB announce that their employees can work anywhere, it is possible that home sales will increase as employees start moving away from their employers.