(MENAFN - AFP) Sales of new single-family homes sank unexpectedly in the United States last month, hitting a five-month low even though prices fell and supplies rose, government data showed Tuesday.
The second straight monthly decline could point to weakening demand despite low mortgage rates. But a broad margin of error suggested the figure could be revised in the coming months.
Sales fell 7.8 percent to an annual rate of 626,000, seasonally adjusted, with sharp drops in the West and Northeast and tepid growth elsewhere.
Amid low unemployment and high consumer confidence, economists had instead expected an increase.
Officials caution the numbers are subject to substantial revision and that trends may take four months to appear.
However, the May reading was 3.7 percent below May of last year.
The volume of newly-constructed houses edged up 2.2 percent to 332,000 in May, representing a supply of 6.4 months at the current sales pace, the highest level since January.
Meanwhile, the median price fell 8.1 percent to $308,000, also the lowest since January.
Jim O'Sullivan, chief US economist at High Frequency Economics, said in a note to clients that the data were "highly volatile and get revised a lot, limiting the information value of a single report."
"Through the volatility, the trend has picked up recently," he said, noting that mortgage applications had risen and that average monthly sales so far in 2019 were above that of the final quarter last year.