WASHINGTON —
Sales of new homes rose a surprisingly strong 16.6% in May with the reopening of major parts of the country potentially fueling activity in the housing market.

The Commerce Department reported Tuesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 676,000 last month.

That was a much better performance than expected. Many economists had forecast that sales would fall in May.

The new home sales numbers come just one day after the U.S. reported a 9.7% plunge in May sales of existing homes to an annual rate of 3.91 million, the slowest pace in nearly a decade.

There are hopes that the housing slump that occurred with the virus shutdowns could be coming to an end, though the millions of jobs lost to the pandemic could impede any rebound.

Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said she expected a modest recovery in sales in coming months following the big declines in the first quarter but she still expects a decline overall this year.

“The slow recovery in the labor market will limit the upside of any rebound in the housing market,” she said.

The median price of a new home rose 4.9% to $317,900 in May after falling by 8.7% in April, a drop that was attributed to heavy discounting by builders in the midst of the coronavirus shutdowns.

The big sales rebound left activity in May 12.7% higher than a year ago.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Devastating job losses: Here’s who got hit the hardest

New York (CNN Business)The coronavirus pandemic wiped out years of job gains for black and Hispanic workers over the span of two months and sent the unemployment rate skyrocketing to record highs for nearly all major worker groups. The unemployment…

Oil prices dip as demand concerns persist

NEW YORK — Oil prices declined on Monday as investors grappled with continued concerns over weak demand outlook. The West Texas Intermediate (WTI) for October delivery lost 7 cents to settle at $37.26 a barrel on the New York Mercantile…

Boeing swings to annual loss as 737 MAX costs near $19 billion

(Reuters) – Boeing Co on Wednesday swung to its first annual loss since 1997 on mounting 737 MAX costs and indicated it would again cut production of its bigger 787 Dreamliner aircraft, currently its main source of cash. Costs related…

Global economy to contract by 4.5% in 2020: OECD

BEIJING — The Organization for Economic Cooperation and Development (OECD) in its latest report published on Wednesday revised up its forecast for global economic output in 2020 to a contraction of 4.5 percent. Original source: China Daily