New, single-family home sales declined 6 percent in May to a seasonally adjusted 551,000-unit annual rate, the NAHB said.
Citing data from the U.S. Department of Housing and Urban Development, and the Census Bureau, the National Association of Home Builders said April’s figures were downwardly revised as well.
But NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Illinois, said the market is still fundamentally strong.
“Although new home sales are down from a robust reading in April, they remain solid and builder confidence in the market is growing — two indicators that the housing sector should strengthen throughout the year," Brady said.
There was a 244,000-strong inventory of new homes for sale in May, which is a 5.3-month supply at current sales levels. The median sales price was $290,400.
NAHB Chief Economist Robert Dietz said the report does not demonstrate any underlying weakness.
"At an annual pace of 551,000 units, new home sales are up relative to the first few months of 2016 as well as last year," he said. "The sales market continues to make overall gains despite month-to-month volatility."