Fueled by the outstanding financing climate and continued solid investment potential of new homes, sales of new single-family homes rose in May to a record-high seasonally adjusted annual rate of 1.4 million units, the U.S. Commerce Department reported. This was 14.8 percent ahead of April's upwardly revised sales pace.
"This is one more report that confirms what builders in the field continue to report: buyer demand for new homes continues to be strong as the economic expansion strengthens and job growth accelerates," Bobby Raybrun, president of the National Association of Home Builders (NAHB).
Sales of new single-family homes in May posted double-digit gains in some regions, including a 53.2 percent jump in the Northeast. The South and West registered 20.3 and 6.5 percent gains, respectively, while sales in the Midwest were flat off the strong April pace. The Commerce report showed that inventories of unsold new homes in May were down to a 3.3 month supply at the current sales rate.
"The extraordinary sales pace for May probably involved some acceleration of transactions in anticipation of higher interest rates down the line," said David Seiders, NAHB chief economist. "But it's clear that underlying housing demand is quite strong and the current supply-demand balance is excellent. We are now forecasting that new home sales will hit another record in 2004."
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