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New single-family home sales fell last month (CNBC).

What’s going on: Sales of new construction houses “dropped 13.7% in May compared with April to 623,000 units on a seasonally adjusted, annualized basis, according to the U.S. Census.”

• That’s 6.3% lower than a year earlier and far below the six-month average (671,000) and the one-year average (676,000).
• Wall Street analysts had forecast the number to come in around 695,000.

Why it’s happening: Mortgage rates are still elevated, having started May at 6.83%, rising to just over 7% and settling at 6.95% as the month closed out.

Cost and availability: “Nationally, the median price of a new home sold in May was $426,600, according to the Census report, 3% above the year-earlier price.”

• Slower sales meant greater supply, with 507,000 new homes for sale at the end of last month. That’s a 9.8-month supply at the current rate of sales, 15% higher than last May.
• The last time the new-home supply was at current levels was the summer of 2022, when the Federal Reserve first began raising interest rates after the global pandemic.

In related news: Sales of previously owned homes, meanwhile, inched up in 0.8% in May ( CNBC), due largely to an increase in supply.

• At the end of May, there were 1.54 million previously owned units for sale. That’s an increase of more than 20% from May 2024. 
• The median cost of a previously owned home sold in May was $422,800, an increase of 1.3% from last May.