MNI DATA ANALYSIS: US May Home Sales +6.7% To 689k SAAR>

--Headline Increase Led By 17.9% Rebound in South; Other Regions Softer

--May Homes Supply Ticks Up, But Months Supply Falls To 5.2 Months

By Kevin Kastner and Holly Stokes

     WASHINGTON (MNI) - New single-family home sales rose by 6.7% to a 

689,000 annual rate in May, led solely by a sharp increase in sales in 

the large South region, data released by the Commerce Department Monday 

showed. 

     New home sales pace was above the 665,000 rate expected, based on 

an MNI survey of economists, but followed downward revisions to the 

previous two months. As a result, market participants are less likely to 

react, especially with one region driving the entire gain. 

     The sales pace remains well above its year ago level, up 14.0% 

unadjusted from May 2017. 

     New homes sales in April were revised down to a 646,000 pace from 

the 662,000 previously announced rate. The March pace was revised down 

very slightly to 671,000 from 672,000. 

     When those revisions are incorporated, the second quarter sales 

pace averaged 668,000, up from 656,000 in the first quarter. 

     When broken down regionally, the rise in May headline sales was due 

to a 17.9% rebound in the South region to a 409,000 level, the highest 

since July 2007. These were offset by declines in the Northeast (-10.0%) 

and West (-8.7%), and a flat reading in the Midwest. 

--HOME SUPPLY WELL ABOVE YEAR-AGO

     The supply of new homes for sale rose by 1.0% in the month to a 

level of 299,000. The current level of supply is 10.3% higher than a 

year earlier, suggesting that supply is adequate to meet demand. 

     Based on the movements in sales and supply in May, the months' 

supply slipped to 5.2 months from the April months' supply of 5.5 

months. The May months' supply was down from the May 2017 level of 5.4 

months. 

     Still, supply of new homes remains fairly high relative to sales, 

as opposed to the very tight supply of existing homes available for 

sale. 

--MEDIAN SALES PRICE DECLINES IN MAY

     The median sales price fell by 1.7% to $313,000 from $318,500 in 

April. The May median price stands 3.3% below the $323,600 level in May 

2017, suggesting that new home prices show less forward momentum than 

the large gains in the median sales price for existing homes. 

     ** MNI Washington Bureau (202) 371-2121 ** 

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