The latest reports surrounding the sales of new homes in the United States in the month of May have just come in. The report shows that in the month of May, the sales of new homes have risen to 696,000. The report confirms that a 10.7% rise has been recorded in the sales of new homes compared to the prior month.

In the month of April, the new home sales recorded were 629,000. The information has been confirmed by the Commerce Department and it was released on Friday.

Predictions by the Wall Street Analysts

Ever since the United States has started re-emerging from the negative impact of the pandemic, the analysts at closely monitoring the real estate sector.

The real estate sector was among the spaces that took a huge low blow due to the pandemic. Following the pandemic and the measurements being taken for its eradication, the real estate industry has started replenishing.

This is when a promising report has come from the real estate sector surrounding the sales of new homes in the month of May. Compared to the actual sales of 696,000, the predictions made by the analysts on Wall Street were too low.

As per the expectations set by the Wall Street analysts, the real estate sector would see the sales of 587,000 new homes in the respective month. Surprisingly, the analysts had previously set their expectations to 591,000 for the same month before revising them to 587,000.

Despite the boost in the month of May, the sales of the new houses on a year-over-year basis are still down at the rate of 5.9%.

New Home Prices Fell in May

As per the real estate analysts, one of the factors that could have led to the high number of sales of new homes could be the house prices. It was recorded that in the month of May, the house prices took a negative turn.

The prices started to experience a dip and were down to a median sales price of $449,000. It is to be noted that a month prior (April), the new homes’ median sale prices were $454,700. From the month of April to the month of May, a 7.2%dip was recorded in the supply of new homes that were up for sale.

Dip in Sales of New Homes as per Regions

The regional report surrounding the sales of new homes between April and May shows exactly how much dip each region faced.

Starting from the West region, the sales were down 39.3%, followed by the South region, experiencing a 12.8% dip. Then it was the Midwest region that recorded 18.3% sales, followed by the Northeast region which recorded a 51.1% dip.

The trend shows that a rollover is being recorded in the housing market. As a result, the next few months would witness a dip in the sales of new houses. The major reason behind the dip would be increased mortgage, interest, and inflation rates.