New home sales beat economists expectations. But the surge was entirely in the South.

New home sales are an interesting mix this month. Sales are up 17.9% in the South, flat in the Midwest, down 8.7% in the West, and down 10% in the Northeast.

Mortgage News Daily reports New Home Sales Up Sharply; Prices Slump.

The sales of new homes surged in May, outpacing the consensus of expectations, and while one months' data is just that, both median and average home prices were down sharply.

The U.S. Census Bureau and the Department of Housing and Urban Development estimated that newly constructed homes sold at a seasonally adjusted annual pace of 689,000 units. This is 6.7 percent higher than the estimate for April, which was downgraded from an original estimate of 662,000 to 646,000. May sales are 14.1 percent higher than those a year earlier; they were at a rate of 604,000.

Home prices were down compared to both April and the previous May and on both a median and an average basis. The median price of a home sold in May was $313,000 (it was $318,500 in April) and the average was $368,500 (down from $394,600). In May 2017 the median sales price was $323,600 and the average was $378,400. Forty-three percent of homes sold were priced under $300,000. This was the largest percentage of such sales since at least last May.

There were 299,000 homes available for sale at the end of the reporting period, an estimate supply of 5.2 months at the current rate of sale. Only 60,000 of that number are available for occupancy. The median time homes have been for sale since completion is 3.7 months.