By JOSH BOAK
AP Economics Writer
WASHINGTON (AP) — Sales of new U.S. houses slumped by 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.
The Commerce Department said on Tuesday that new houses sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen by 3.7% below the rate they occurred at in the same period in 2018.
Lower mortgage rates and a strong job market have yet to unleash more house buying. Sales of new houses plummeted by 35.9% in the West and 17.6% in the Northeast. New-home sales rose 4.9% in the South and 6.3% in the Midwest, which are generally more affordable markets.
The median sales price of a new home fell by 2.7% from a year ago, to $308,000.
Still, there are signs that sales could recover.
Sales of existing houses — which are the bulk of the market — rebounded in May. They increased 2.5% to a seasonally adjusted annual rate of 5.34 million, evidence that lower mortgage rates might ultimately lead to increased buying.