Homes for sale were red-hot properties in May, as new, single-family homes sold at their fastest pace in more than seven years, according to the latest U.S. Department of Commerce figures. The good news came after the National Association of Realtors reported sales of existing homes climbed to a six-year high last month.
Job growth and a slight easing of credit requirements and perhaps a reaction to slightly elevated interest rates pushed new home sales up by 2.2% last month, the government reported, and up 19.5% from a year earlier. Markets in the Northeast posted the largest gains.
The median price of a new house in May was $282,800, the Commerce Department said. Median home prices have climbed 7.9% over the last 12 months.
The sales surge is good news for homebuilders, who reported high optimism for the next few months in a National Association of Home Builders survey earlier this month.
But some economists have cautioned that the tight housing inventory — especially of more affordable, entry-level homes — could clip the climb in sales, especially as more first-time buyers, including reluctant millennials, find they cannot afford the product that's available or qualify for mortgages.