Sales of New Homes Post 4.6% Unexpected Increase in May

Sales of new single-family houses in May 2006 were at a seasonally adjusted annual rate of 1,234,000, according to estimates released by the U.S. Census Bureau. This is 4.6% above the revised April rate of 1,180,000, but is 5.9% below the May 2005 estimate of 1,311,000.

The 4.6% increase in sales pushed the sales rate to the highest level since Dec 2005 and followed increases of 5.9% in April and 7.3% in March.

The median sales price of new houses sold in May 2006 was $235,300; the average sales price was $294,300. 

The seasonally adjusted estimate of new houses for sale at the end of May was 556,000. This represents a supply of 5.5 months at the current sales rate.

Analysts are still looking for sales of both new and existing homes to fall by around 10 percent this year as rising mortgage rates crimp demand. The lowest mortgage rates in four decades helped to propel sales to five straight annual records.(AP)

Mortgage rates rose last week to a nearly four-year high of 6.71%, according to a nationwide survey by Freddie Mac.

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