May new home sales blew out the forecast as they soared 16.9% year-over-year to 504,000. It was the highest monthly sales rate since May 2008.
Sales also jumped 18.6% from April which saw just 425,000 sales.
A "sale" for new home purposes simply means that a contract has been signed. It doesn't mean that those homes have actually closed.
Inventory decreased to 4.5 months from 5.3 months in April.
Median home price jumped to $282,000 from $275,800 in April. The builders appear to be targeting the more expensive price point right now.
New home sales can be volatile month to month. If you look at year-to-date data, new home sales are up just 1% so far in 2014.
Existing home sales are actually down 7% year-to-date.
New home sales are important to the economy because they create jobs not only in construction but in electrical work, plumbing, landscaping, flooring, and interior decorating.
In the last FOMC press conference, Chairman Yellen talked about worries the Fed had about the housing recovery as sales appeared to be slowing.
Does this latest data ease some of those fears?
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