Sales of new single-family houses in May are estimated at a 623,000 annual rate, a significant deceleration from the revised 722,000 (previously 743,000) reported for April, and below the 694,000 expected in the Econoday survey of forecasters.

May's new home sales rate is down 13.7 percent from April, and has declined 6.3 percent compared to the May 2024 estimate of 665,000.

The median sales price of new houses sold in May was $426,600 compared to $411,400 in April, and $414,300 in May 2024. The average sales price was $522,200.

The inventory of new houses for sale rose from 500,000 at the end of April to 507,000 at the end of May. The months' supply jumped from 8.3 months in April to 9.8 months at the current sales rate.

The consensus looks for a retreat to 694K in May from a surprisingly strong 743K in April.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.