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Sales of new single-family homes in the United States increased more than expected in May as sales in the South reached their highest level in almost 11 years.

The Commerce Department said Monday that new home sales jumped 6.7% to 689,000 units last month, the highest level since November 2017. The pace of April sales was revised to 646,000 units.

The sharp rise in new home sales observed last month has untied the fall of April. Economists polled by Reuters had forecast new home sales, which account for 11% of housing market sales, up only 0.7% at a rate of 667,000 units in May.

Sales in the South, which account for the bulk of transactions, rebounded 17.9% to 409,000 units in May, the highest level since July 2007. The increase ended two months ago. consecutive decline.

Sales fell 10.0% in the Northeast and 8.7% in the West. They were unchanged in the Midwest.

New home sales are licensed and tend to be volatile from one month to the next. They increased by 14.1% over last year. New home sales are being stimulated by a tightening of inventories in the previously-owned homes market.

A report last week showed that sales of existing homes declined for a second consecutive month in May.

Supply has lagged behind the strong demand for housing, which is driven by a robust labor market, leading to a sharp rise in housing prices. Economists say high mortgage rates do not seem to weaken demand.

The fixed mortgage rate of 30 years averaged 4.57% last week and has risen more than 50 basis points this year. Further increases are likely after the Federal Reserve raised its interest rates earlier this month for a second time this year and it expects two additional rate hikes. here the end of the year.

US stocks traded significantly lower on Monday because of investor concerns over escalating tensions between the US and its trading partners, as US Treasury prices rose. The dollar was slightly weaker against a basket of currencies.

Falling median prices

The median price of new homes fell 3.3% to $ 313,000 in May from a year ago. It was the lowest price of the year. The decline in new home prices is likely to be temporary.

There were 299,000 new homes on the market in May, up 1.0% from April. The supply represents a little more than half of what she was at the peak of the housing boom in 2006.

Builders are struggling with higher prices for lumber and labor and land shortages. A poll last week revealed a decline in confidence among single-family home builders in June, as builders "increasingly feared tariffs on Canadian lumber and other products imported goods adversely affect the affordability of housing.

In April 2017, the Trump administration imposed anti-subsidy duties on imports of Canadian softwood lumber.

Residential investment was contracted in the first quarter and economists are expecting housing to recede again to gross domestic product in the second quarter.

The housing market is lagging behind overall economic growth, which seems to have picked up speed in the second quarter after slowing down early in the year. Growth estimates for the period from April to June reach an annualized rate of 4.7%. The economy grew 2.2% in the first quarter.

At the pace of May sales, it would take 5.2 months to sell homes on the market, compared to 5.5 months in April. Nearly two-thirds of homes sold last month were under construction or construction.