WASHINGTON, June 23 (Reuters) – Sales of new U.S. single-family homes fell to a one-year low in May as the median price of newly built houses soared amid expensive raw materials, including framing lumber.
The second straight monthly decline in sales reported by the Commerce Department on Wednesday was the latest indication that the tailwind from the COVID-19 pandemic could be subsiding. Single-family housing benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the pandemic.
“New home sales along with existing home sales suggest home buying activity is past its peak,” said Chris Rupkey, chief economist at FWDBONDS in New York. “We don’t know what is going to happen when the stay-at-home economy shifts to going back to the office.”
New home sales dropped 5.9% to a seasonally adjusted annual rate of 769,000 units last month, the lowest level since May 2020. April’s sales pace was revised down to 817,000 units from the previously reported 863,000 units. The median new house price jumped 18.1% from a year earlier to $374,400 in May.
Economists polled by Reuters had forecast new home sales, which account for 11.7% of U.S. home sales, would be at a rate of 870,000 units in May.