New Home Sales Remain Stable

Sales of newly built single-family homes have remained relatively stable the past four months, meeting a Commerce Department standard for the establishment of a trend.

The Department's monthly report on new homes sales, released Thursday, reported a seasonally-adjusted total of 342,000 new single-family home sales in May, down a statistically insignificant 0.6 percent from April. Sales have fluctuated relatively little over the last four months, which the Commerce Department says is the minimum required to establish a trend, staying between 354,000 and 335,000, a 5 percent range.

By contrast, other new housing sales reports this past year have shown changes of as much as 56,000 units in a single month, so the past four months would seem to suggest that the new housing market is stabilizing following series of sharp declines. Even so, the May figures represent a 33 percent decline from the 509,000 units reported sold in May 2008 and are barely one-fourth of the 1,311,000 reported sold when the market was near its peak in May 2005.

The May median sales price was reported at $221,600, up from $212,600 in April and the highest since December. The May median sales price represents a 3.4 percent decline from the May 2008 median new home price of $229,300. The median price was as high as $258,200 as recently as March 2007.

Overall, the Commerce Department reported there are 292,000 new homes available for sale, representing a 10.2 month supply at current sales rates. That is a reduction from the 12.4 months reported in January, but still represents a considerable excess inventory compared to the peak of the market a few years ago, when new housing inventories typically were around a 4-5 month supply.