Sales of new homes rose in May to the fastest pace in five years, a solid gain that added to signs of a steadily improving housing market. New Mexico sales increased as well.
New-home sales across the country rose 2.1 percent last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008, the Commerce Department reported Tuesday.
The median price of a new home sold in May was $263,900, up 3.3 percent from a year ago.
Sales of new homes remain below the 700,000 annual rate that’s considered healthy by most economists. But the pace has increased 29 percent from a year ago.
Analysts say the housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some drag from higher taxes and federal spending cuts.
The sales gains in May were led by a 40.7 percent increase in the Midwest followed by a 20.7 percent gain in the Northeast. Sales were also up 3.6 percent in the West but they fell 9 percent in the South.
The Realtors Association of New Mexico – which measures a combination of new and existing homes – said there were 1,622 sales in May compared to 1,393 sales reported in May of 2012 and 1,201 sales in May 2011.
The reported median price – which indicates half the properties sold for more and half for less – of a New Mexico home in May was $172,000. This was a 1.2 percent higher than the median of $170,000 in May of last year and a 4.2 percent rise from May 2011 median of $165,000, RANM said.
“Mortgage interest rates have slightly increased in the past 30 days; however, interest rates remain very low. Many homebuyers are jumping at the opportunity to buy now,” RANM President Cathy Colvin said in a release.
“We are experiencing many first-time buyers as well as buyers who are moving up,” she said. “However, New Mexico’s economy needs to improve before the housing market will see significant improvement.”