Jump in new home sales marks first gain of the year

Additionally, the new report showed the median sales price in May was $449,000 and the average sales price was $511,400.

At the current sales rate, it would take 7.7 months to exhaust the supply of new homes, compared to 8.3 months in April and 5.4 months in the previous year.

The Bureau and HUD also revealed that majority of the new homes sold in May were still under construction, with only 8% having been completed. Those awaiting construction rose to 190,000 from a month earlier, showing the highest increase since the start of the year.

A separate report from the National Association of Home Builders showed homebuilder sentiment at a two-year low in June, said Bloomberg.

“The housing market faces both demand-side and supply-side challenges,” said Robert Dietz, chief economist at the NAHB, in a statement to Bloomberg. “Residential construction material costs are up 19% year-over-year with cost increases for a variety of building inputs.”