May home sales drop
Sales of new single-family homes declined 2.1 percent to a seasonally adjusted 319,000 units in May, according to figures released by the U.S. Commerce Department.
Officials with the National Association of Home Builders said the drop partially offsets gains made in April.
"Today's report indicates that new-home sales are holding fairly steady at a relatively low rate, with both April and May sales numbers running above the first-quarter average," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "In view of the slow progress of economic recovery and the challenges builders continue to face with regard to rising materials prices, access to construction credit, competition from foreclosed homes and inaccurate appraisals, the averages for the last two months combined represent some very slow improvement which should continue as expected economic gains boost consumer confidence."
But the report does have some good news, said David Crowe, the association’s chief economist.
"One bright spot in the government's May housing numbers is the inventory of new homes for sale, which continued to fall to a new record low last month," Crowe said. "This means that builders continue to be appropriately cautious about adding new homes to the marketplace, and it has pushed down the months' supply to a level typically found in stable markets."