June 25, 2004: New Home Sales Reach Record Level In May
"This is one more report that confirms what builders in the field continue to report: buyer demand for new homes continues to be strong as the economic expansion strengthens and job growth accelerates," said National Association of Home Builders (NAHB) President Bobby Rayburn. "Indeed, NAHB's Housing Market Index for June shows continued high levels of home sales and builder confidence."
"In addition, thin inventories of unsold new homes are an indication of the continuing health and good balance of this market," said Rayburn. The Commerce Department report showed that inventories of unsold new homes in May were down to a 3.3 months' supply at the current sales rate.
Sales of new single-family homes in May posted double-digit gains in some regions, including a 53.2 percent jump in the Northeast. The South and West registered 20.3 and 6.5 percent gains, respectively, while sales in the Midwest were flat off the strong April pace.
"The extraordinary sales pace for May probably involved some acceleration of transactions in anticipation of higher interest rates down the line," said David Seiders, NAHB's chief economist. "But it's clear that underlying housing demand is quite strong and the current supply-demand balance is excellent. We are now forecasting that new home sales will hit another record in 2004. This powerful performance in the second quarter will certainly keep housing as a strong, positive component of the nation's GDP."
Publication date: 06/21/2004