New Home Sales, which measure signed contracts on new homes, rose 12.2% from April to May to a 763,000-unit annualized pace. Sales were 20% higher than a year ago, and at their best level since February 2022. 

What’s the bottom line? The rise in signed contracts for new homes correlates with the low level of existing homes that are listed for sale. This has helped boost confidence among homebuilders, which is a positive sign as more new homes are needed to meet the overall demand among buyers. While there were 428,000 new homes for sale at the end of May, only 69,000 (or 16%) were completed, with the rest either not started or under construction, meaning that available supply was below normal levels.

This ongoing dynamic of high demand relative to low supply will continue to be supportive of home prices.

On that note, the median sales price was $416,300, which was down from $450,700 a year ago. However, this figure is not the same as appreciation but represents the mid-price and can be skewed by the mix of sales among lower-priced and higher-priced homes. Recent appreciation reports from Case-Shiller and the Federal Housing Finance Agency have shown that home prices are rising again on a monthly basis, as detailed below.