WASHINGTON—Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing.
Purchases of newly built single-family homes decreased 7.8% to a seasonally adjusted annual rate of 626,000 in May, the Commerce Department said Tuesday. It was the slowest pace of sales since December.
Economists surveyed by The Wall Street Journal had expected a sales pace of 683,000 homes in May.
The number of homes for sale in May would last 6.4 months at the recent pace. That is up from 5.6 months a year earlier. The median sales price of a new home in May was $308,000, down from $316,700 a year earlier. But lower prices and more supply didn’t stoke better demand last month.
Sales data can be volatile and subject to revisions. The May decrease came with a margin of error of plus or minus 14.7 percentage points. Sales in April were revised up modestly to a 679,000 pace, while March sales were revised down to 705,000.
New-home sales are a relatively narrow slice of all U.S. home sales—about 90% of homes purchased in the U.S. were previously owned. Sales of previously owned homes rose in May, increasing 2.5% to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said last week.
The two markets moved in opposite directions last month.
Mounting concerns about the global economy have pushed down borrowing costs, and that appears to be aiding the market for previously owned homes. Mortgage rates are down more than a percentage point from late last year, according to Freddie Mac. That helps make properties more affordable for buyers who finance their purchases.
Low unemployment and rising wages are putting more households in a position to buy, somewhat insulating the broader real-estate sector from a global slowdown.
Tuesday’s report showed home sales fell sharply in the Northeast and West, while rising in the Midwest and South.