Sales of new single‐family houses in May were at a seasonally adjusted annual rate of 696,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.7% above the revised April rate of 629,000 but 5.9% below the May 2021 estimate of 740,000.

“The biggest piece of information that came from the latest new-home sales report was the revision to the April report. Last month, industry experts were shocked to see only 591,000 homes were sold on a seasonally adjusted annual basis. That number was revised up to 629,000 from this morning’s release, which tells us the slowdown was less dramatic than originally expected,” says Ali Wolf, chief economist at Zonda. “Contrarily, the May new-home number surprised to the upside showing 696,000 sales. I expect this number to be revised down next month as Zonda data captures a bit more slowing in the market in May and June in response to higher mortgage rates.”

The median sales price of new houses sold in May was $449,000, while the average sales price was $511,400.

The seasonally adjusted estimate of new homes for sale was 444,000 at the end of May, representing a 7.7-month supply at the current sales rate.

“With the May sales rebound and the April revision, second quarter sales are shaping up to be in line with our outlook,” says Doug Duncan, chief economist at Fannie Mae. “Going forward, we expect home builders to be willing to offer more incentives and discounts to support sales in a rising mortgage rate environment. We also expect the near-term sales pace to remain at a solid level but, nonetheless, to trend downward in coming quarters as higher mortgage rates weigh on affordability.”