By Julianne Pepitone, CNNMoney.com contributing writer
NEW YORK (CNNMoney,com) — Sales of newly constructed homes fell unexpectedly in May and were down almost a third from last-year’s levels, a government report said Wednesday.
New home sales ticked down 0.6% last month to a seasonally-adjusted annual rate of 342,000, the Commerce Department reported. That was from a revised reading of 344,000 in April.
Analysts expected the rate of new home sales to rise to 360,000, according to a consensus estimate of economists compiled by Briefing.com.
New home sales were 32.8% below the same month a year ago, when the estimate stood at a 509,000 annual rate.
This is a big difference from existing homes sales. On Tuesday, the National Association of Realtors reported that sales of those properties rose 2.4% in May, as prices fell nearly 17% from a year ago.
“Newly constructed homes simply cannot compete with the values found in the existing home market,” said Bob Walters, chief economist at Quicken Loans.
In recent months, plunging mortgage rates had attracted buyers into the market. But in the past few weeks they have rebounded slightly to near 5.76% for a 30-year fixed mortgage. They have been pulled up by higher bond yields.
But even with the recent increase, mortgage rates still remain much lower than last year, when the average 30-year fixed mortgage rate was 6.62%.
Median and average prices: In a sign that single-family home sales may have already hit bottom, the median sales price continued to increase.
The median sales price of new homes rose to $221,600 in May, up more than 4% from a revised $212,600 in April — and up more than 3% from the median price of $229,300 in May 2008.
The average sales price in May was $274,300,up more than 5% from a revised $260,800 in April.
Supply: The seasonally-adjusted estimate of new houses for sale at the end of May was 292,000, a 10.2-month supply at the current sales rate.
“As we get deeper into the summer and ever-closer to the start of the next school year, we will see some positive moves in the new home market,” said Walters.