Sales of latest US single-family homes surged to the best level in nearly 1-1/2 years in May, benefiting from a dearth of previously owned homes available on the market.
Latest home sales jumped 12.2% to a seasonally adjusted annual rate of 763,000 units last month, the best level since February 2022, the Commerce Department said on Tuesday.
April’s sales pace was revised all the way down to 680,000 units from the previously reported 683,000.
Economists polled by Reuters had forecast recent home sales, which account for a small share of home sales, slipping to a rate of 675,000 units.
Sales shot up 20% on a year-on-year basis in May.
Latest home sales are counted on the signing of a contract, making them a number one indicator of the housing market.
They, nevertheless, could be volatile on a month-to-month basis.
Latest home sales jumped 12.2% to a seasonally adjusted annual rate of 763,000 units last month, the best level since February 2022.AP
The housing market has likely found a floor and may very well be even improving.
Data last week showed homebuilder confidence rising into positive territory in June for the primary time in 11 months.
Housing starts surged in May as supply stays tight, while home resales edged up.
Economists say the signs of revival within the housing market suggested the Federal Reserve would want to maintain raising rates of interest.
The housing market has been the most important causality of the central bank’s fastest rate mountaineering cycle because the Eighties.
The Fed, which has raised its policy rate by 500 basis points since March 2022, has signaled two more rate increases this yr to chill demand in the general economy.
The rise in sales last month was despite mortgage rates resuming their upward trend.
The common rate on the favored 30-year fixed mortgage was higher in May relative to April, rising to six.57% by the last week of the month, in accordance with data from mortgage finance agency Freddie Mac.
Latest home sales posted double-digit growth within the Northeast, South and West.
They rose 4.1% within the Midwest.
The median recent house price in May was $416,300, a 7.6% drop from a yr ago.
There have been 428,000 recent homes available on the market at the top of last month, down from 432,000 in April.
At May’s sales pace it could take 6.7 months to clear the provision of homes available on the market, down from 7.6 months in April.