2020.06.2314:18:00UTC+00U.S. New Home Sales Spike Much More Than Expected In May

New home sales in the U.S. showed a substantial increase in the month of May, according to a report released by the Commerce Department on Tuesday.

The report said new home sales spiked by 16.6 percent to an annual rate of 676,000 in May from a significantly downwardly revised rate of 580,000 in April.

Economists had expected new home sales to jump 2.7 percent to an annual rate of 640,000 from the 623,000 originally reported for the previous month.

The downwardly revised data for April indicates new home sales plunged by 5.2 percent during the month compared to the previously reported 0.6 percent uptick.

New home sales in the Northeast skyrocketed by 45.5 percent to a rate of 32,000, home sales in the West soared by 29.0 percent to a rate of 169,000 and home sales in the South surged up by 15.2 percent to a rate of 402,000.

Meanwhile, the report showed a notable decrease in new home sales in the Midwest, which tumbled by 6.4 percent to a rate of 73,000.

The Commerce Department said the median sales price of new houses sold in May was $317,900, up 4.9 percent from $303,000 in April and up 1.7 percent from $312,700 in the same month a year ago.

The estimate of new houses for sale at the end of May was 318,000, representing 5.6 months of supply at the current sales rate.

On Monday, the National Association of Realtors released a separate report showing existing home sales in the U.S. tumbled by much more than anticipated in the month of May.

NAR said existing home sales plunged by 9.7 percent to an annual rate of 3.91 million in May after plummeting by 17.8 percent to a rate of 4.33 million in April. Economists had expected existing home sales to slump by 4.8 percent to a rate of 4.12 million.

However, NAR chief economist Lawrence Yun expressed confidence home sales will rise in the coming months as the economy reopens.