New-home sales soared in May, but the gains simply put the market back on track to match last year’s overall pace, rather than signaled a significant momentum gain.
Home builders, economists and analysts described the May increase as a delayed rebound to normal sales levels after a weak start to the spring selling season, which was hampered by harsh weather and the fitful economic recovery. Many cautioned that one or two more months of strong gains are needed to prove that the housing recovery indeed has gained steam.
Prices, in contrast, are up sharply. The median sales price of new homes sold in May was $282,000, almost 7% above a year earlier.