New home sales decline in May; Up over 15 percent from year before

Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for May 2011 showing a decrease of 2.1 percent from the month before, and an increase of 13.5 percent from a year ago.

The seasonally-adjusted new home sales rate for May was 319,000 homes, down from 326,000 the month before. The supply of new homes on the market decreased from an adjusted 6.3 month supply the month before to a 6.2 month supply in May. The median new home price increased for the month to $222,600, a 2.6 percent increase from a revised median price of $217,000 the month before and a decrease of 3.4 percent from a year ago.

My Mantra

As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the world they compute the numbers. Second, I just don’t think discussing the “rate” of new home sales paints a realistic picture of the market.

Here is the raw data, the ACTUAL new homes sold- no fluff, no “adjusting” For May, 2011:

  • 30,000 new homes sold, a decrease of 3.2 percent from 31,000 new homes sold in the previous month, and a 15.4 percent increase from a year ago when there were 26,000 new homes sold.
    • As usual, the South had the majority of the new home sales with 16,000 this month (53.0 percent of the total in US)
    • the west region had 8,000 new homes sold.
    • the Midwest had 4,000 new homes sold.
    • The Northeast had 2,000 new homes sold.
  • YTD there have been 132,000 new homes sold, a 13.8 percent decrease from this time last year.
  • New Homes in the US in sold during the month been for sale for a median time of 9.2 months since the homes were completed, up slightly from 8.9 months the month before.

My prediction for 2011…

Ok, it’s time to take off the rose-tinted glasses I’ve had on the last few months and am going to have to adjust my forecast downward. I’m going to lower my new home sales forecast the same for this year at from 331,000-361,000 homes to 290,000 – 319,000 new homes sold in 2011.

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