US new home sales fell for the second straight month in May while the median sales price hit a new record high, government data said Wednesday, reinforcing the case that the housing market is slowing.
The Commerce Department said new home sales were at 769,000 annualized last month, 5.9 percent below April's downwardly revised rate and also lower than analysts had forecast.
The median sales price of new properties climbed to $374,400, even as supply increased so that, if no more houses came onto the market, the stock would sell in 5.1 months at the current pace.
"Sales look set to fall further, with a decent chance they'll soon be back below the pre-Covid trend," said Ian Shepherdson of Pantheon Macroeconomics.
Real estate demand soared during the worst of the Covid-19 pandemic as those who could afford it sought out new properties, and the pace in May was 9.2 percent higher than the same month in 2020.
However Shepherdson said the data indicate the arrival of vaccines against the virus has chilled demand, pointing to the uptick in supply of new properties.
"The brief, albeit frenetic, boom phase of the housing recovery is over," he said.
Sales trends were uneven across the country, rising 33.3 percent in the Northeast but plunging 14.5 percent in the South. The West saw growth of 6.7 percent, while sales in the Midwest were flat.
Mahir Rasheed of Oxford Economics said the elevated prices have kept consumers out of the market, and predicted they'd soon come down.
"Sky-high lumber prices have contributed to the recent spike in new home prices, although some relief may be on the horizon given the plunge in lumber prices since mid-May," he said in an analysis.