US new home sales unexpectedly fall in May

[WASHINGTON] Sales of new US single-family homes unexpectedly fell in May, likely as higher mortgage rates and prices continued to sideline potential buyers from the housing market.

New home sales dropped 7.3 per cent to a seasonally adjusted annualised rate of 580,000 units last month, the Commerce Department’s Census Bureau said on Wednesday (Jun 24). New home sales, which are counted at the closing of a contract, account for a small share of US home sales and tend to be volatile on a month-to-month basis. They declined 6.8 per cent year-over-year in May.

The median new house price of US$424,900 in May was little changed from a year earlier.

Mortgage rates have risen as the US-led war with Iran drove up oil prices, boosting inflation and Treasury yields. The rate on the popular 30-year fixed-mortgage has increased by about 50 basis points since the conflict started at the end of February, data from mortgage finance agency Freddie Mac showed. It averaged 6.47 per cent last week. REUTERS