Low home supply has been a primary issue in the housing market. Unexpectedly a report from the U.S. Census Bureau and the Department of Housing and Urban Development shows home inventory for new homes for sale in May was at a 14-year high, with a 7.7-month supply available at the current sales pace.
This signals good news for home shoppers, as a growing inventory of available new homes is the fastest way to balance the market. It provides buyers with more houses to choose from and helps relieve upward pressure on prices. These recent gains may be a sign that the housing market is trending toward better balance and fewer home price spikes.
The report also indicated new home sales increased 10.7 percent in May from the month before. Contrary to what economists polled prior to the release predicting sales would fall month over month.
Source: reuters.com
