New Home Sales Enjoy a 12.2% Increase in May

1st quarter results are reporting an 11.3% increase in new home sales for the first 3 months of the year and a phenomenal 12.2% increase in new home sales compared year-over-year to May, 2016.  April’s home sales numbers increased the total amount of homes sold to 593,000, and the number of total new homes sales is 210,000. More good news for new home sales is that there has been a 2.9% increase in contracts for new homes for the month of May, bringing new home contracts to 610,000.

New home sales numbers are also calculated by a 3-month moving average that advances each month to encompass a new data set.  According to this moving average, new homes sold stood at 616,000, which compared to all post-recession numbers is near the high of 619,000. And, the month of May makes the third consecutive month of calculating 3-month moving averages that new home sales have been over 600,000.

According to a joint report by HUD and the Census Bureau, home inventory is on the rise, increasing from 240,000 where it stood for most of 2016 to 268,000, which averages out to a 5.3-month inventory, which will give home buyers a bit more breating room as they place bids and write contracts on homes for sale.

Builders, however, have gotten the message and a good start on new homes being built.  Homes under construction are up by 6% compared to last year, and completed builder new homes are up by 5% last year for a total of 62,000.  In St. Tammany Parish, building permits have increased by 23.6%, which matches the national reports of not-yet-started homes increaseing by 43% for a total of 53,000 in May.  May, 2016 only saw 37,000 homes-to-be-built.  The southern region saw a 6% increase in home sales during the month of May. Predictions of successful sales of single-family homes in the upcoming months are punctuated by solid builder confidence and tight inventory on existing and new homes for sale.

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