This April 16, 2020 photo shows a real estate company sign that marks a home for sale in Harmony, Pa. U.S. new home sales plunged 15.4% in March as the lockdowns that began in the middle of the month began to rattle the housing market. The Commerce Department reported Thursday, April 23, that sales of new single-family homes dropped to a seasonally ajdjusted annual rate of 627,000 last month after sales had fallen 4.6% in February. (AP Photo/Keith Srakocic)
By Martin Crutsinger
Updated 12:04 pm ET
Sales of new homes rose a surprisingly strong 16.6 percent in May with the reopening of major parts of the country potentially fueling activity in the housing market.
The Commerce Department reported Tuesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 676,000 last month.
That was a much better performance than expected. Many economists had forecast that sales would fall in May.
The new home sales numbers come just one day after the U.S. reported a 9.7 percent plunge in May sales of existing homes to an annual rate of 3.91 million, the slowest pace in nearly a decade.
There are hopes that the housing slump that occurred with the virus shutdowns could be coming to an end, though the millions of jobs lost to the pandemic could impede any rebound.
Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said she expected a modest recovery in sales in the coming months following the big declines in the first quarter but she still expects a decline overall this year.
"The slow recovery in the labor market will limit the upside of any rebound in the housing market," she said.
The median price of a new home rose 4.9 percent to $317,900 in May after falling by 8.7 percent in April, a drop that was attributed to heavy discounting by builders in the midst of the coronavirus shutdowns.
The big sales rebound left activity in May 12.7 percent higher than a year ago.
Bambu Ventures's Kyle Pretsch dives into Lemonaid’s $10M buyout, down from 23andMe’s $400M price tag, and what’s next after Chrome Co.’s dramatic pivot.
Former Cisco Systems CEO John Chambers learned all about technology’s volatile highs and lows as a veteran of the internet’s early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology in artificial intelligence. Chambers is trying take some of the lessons he learned while riding a wave that turned Cisco into the world's most valuable company in 2000 before a crash hammered its stock price and apply them as an investor in AI startups. He recently discussed AI's promise and perils during an interview with The Associated Press.
Grove Collaborative’s CEO shares how the company is reinventing everyday goods with sustainability at the core and working toward a plastic-free future.
Atlanta Mayor Andre Dickens shares plans for affordable housing, community-led growth, and why private and public grocery stores could be key to food equity.
Tesla reported a surprise increase in sales in the third quarter as the electric car maker likely benefited from a rush by consumers to take advantage of a $7,500 credit before it expired on Sept. 30. The company reported Thursday that sales in the three months through September rose 7% compared to the same period a year ago. The gain follows two quarters of steep declines as people turned off by CEO Elon Musk’s foray into right-wing politics avoided buying his company’s cars and even protested at some dealerships. Sales rose to 497,099 vehicles, compared with 462,890 in the same period last year.
Tom’s Guide Editor-in-Chief Mark Spoonauer breaks down Apple & Amazon's latest product drops—what's hot, what's hype, and what really matters for users.
