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SoFi begins offering avocado toast with every new mortgage, wins the internet

“Okay, now that’s funny.”

That’s what I thought to myself when I first read the press release.

In case you missed it, SoFi announced recently that it is now offering a one-month supply of avocado toast with each new mortgage in the month of July.

I must admit; it’s a pretty funny gimmick and really smart marketing.

Here’s why.

About a month or so ago, “the internet” (and I use the sarcastic air quotes here) was all hot and bothered after an Australian millionaire suggested that Millennials would be able to afford a home if they could just give up their daily dose of avocado toast.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” 35-year-old real estate developer Timothy Gurner told Australia’s 60 Minutes.

“We’re at a point now where the expectations of younger people are very, very high. They want to eat out every day; they want travel to Europe every year,” Gurner continued. “The people that own homes today worked very, very hard for it,” he said, adding that they “saved every dollar, did everything they could to get up the property investment ladder.”

And as these types of things are wont to do, Gurner’s proclamation went viral.

Twitter lit up with joke after joke about how many avocado toasts would it take to buy a house in (insert large city here) and people sharing pictures of their avocado toast breakfast (otherwise known as their down payment).

For a while there, one couldn’t go more than a few minutes on Twitter without seeing some form of joke or comment about avocado toast’s apparent relationship to housing.

Then, as so often happens, the “avocado toast=a new house” furor eventually died down.

Until Thursday that is, when SoFi announced that it would be offering a month’s supply of avocado toast with each new mortgage.

And what happened next? Avocado toast was right back in the mainstream housing discussion again, which is exactly what SoFi wanted.

Personally, I think that SoFi’s offer is very savvy marketing.

Here’s the thing: I don’t think for one second that anyone is going to be convinced to get a mortgage with SoFi specifically because of this avocado toast offer.

No one who wants a mortgage is going to choose SoFi because they’re offering avocado toast. No one likes avocado toast that much.

And another thing, SoFi isn’t really even offering avocado toast.

They’re offering bread and avocados. You’ve still gotta toast the bread yourself.

Here’s SoFi’s offer in the company’s own words (emphasis added by me):

Once someone completes their home purchase with a SoFi mortgage in July, they’ll receive an email with the option of choosing regular or gluten-free bread to go along with their avocados. The ingredients will be divided over three shipments to ensure freshness upon delivery. Recipients will still need to toast the bread.

And there’s nothing to go with it. It’s just bread and avocados (as Bloomberg’s Matt Levine pointed out on Twitter).

Now, I’ve never had avocado toast before because it personally it seems ridiculous to pay that much for toast with avocado on it. But apparently it’s quite the popular item.

And according to the image that SoFi added to its press release, avocado toast apparently comes with all sorts of toppings: hard-boiled eggs, onions, tomatoes, jalapeños, and various seasonings and whatnot.

Avocado toast

SoFi is gonna send you a loaf of bread and some avocados and you gotta do the rest of the work yourself.

But that’s not the point. The point is SoFi’s game.

So what’s SoFi’s game here? Free publicity, and they got it in spades.

SoFi published its press release about the avocado toast offer Thursday morning at 9:00 am Eastern.

What happened next is why this whole thing is some really smart marketing. Media outlet after media outlet started writing about the offer.

Headlines about SoFi’s offer appeared on CNBC, Money, Fortune, Curbed San Francisco, Silicon Beat, the Observer, and the Associated Press, to name a few.

And the AP picking it up means that it probably appeared in a great number of newspapers all over the country today.

Why? Because it’s funny and quirky, and little bit ridiculous. And those are words that aren’t usually used to describe stories from the mortgage business.

Trust me, I know.

So basically it’s avocado toast + mortgages = pageviewzzzzzzzz.

So media outlets get what they want, those precious pageviews (thank you very much dear readers).

And what does SoFi get? A boatload of free advertising.

CNBC, Money, Fortune, Curbed San Francisco, Silicon Beat, the Observer, the Associated Press, and HousingWire all just ran a free commercial for SoFi and its offer.

Again, I doubt that SoFi’s offer on its face will pull in much business, but SoFi just bought itself a day’s worth of free publicity and planted itself right in the middle of the avocado toast=housing zeitgeist.

And what did it cost SoFi? Nothing. Just a couple dozen loaves of bread and about 20 pounds of avocados.

“Pundits have unfairly besmirched avocado toast as the reason younger Americans aren’t buying homes. We know that’s wrong — it’s because the traditional mortgage product hasn’t evolved,” Joanne Bradford, SoFi’s chief marketing officer, said in SoFi’s press release. “In addition to offering a mortgage with 10% down and no borrower-paid private mortgage insurance required, we wanted to help people have their avocado toast and eat it too.”

So the borrowers get to “have their avocado toast and eat it too,” and SoFi gets to bathe in free publicity and make money off it too.

Seems like a pretty smart marketing gimmick to me.

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Hotseat: Robert Behrend of Auction.com

As a wave of new investors begins to buy real estate at auction, educating them on what to expect becomes more important than ever. Robert Behrend, senior vice president of customer engagement at Auction.com, explains how his company is making communication with buyers and sellers a top priority.

HousingWire: How is Auction.com’s approach to disposition different from a traditional disposition strategy?  What is Auction.com’s solution to disposition?

BehrendRobert Behrend: Our solution to disposition centers on a holistic strategy which centralizes the use of an online transactional platform, asset management services, and engagement with local real estate agents into one unified place. 

Our approach is to the take the expansive reach of our online transactional platform and partner with the expertise of the REO asset management company along with the local market intelligence from the real estate agent community. As a result, this provides for a more streamlined and optimized disposition strategy.

We are the nation’s leading online real estate marketplace and have invested significantly in servicing and educating buyers. An example of this continued investment is our Customer Engagement team, which works to meet the needs of prospective and returning buyers.

The team delivers a multitude of services including customer service for buyers of distressed assets, guiding high value buyers through the VIP team and educating all buyers on properties and the auction process. The Customer Engagement team’s work provides ample resources and partnerships to build a healthy ecosystem for both sellers and buyers to “Bid with Confidence, Win with Confidence and Close with Confidence.”

HW: What does each of the Customer Engagement Team’s responsibilities entail? And how do they help buyers and sellers?

RB: Our Customer Engagement team works to deliver the best results for both the asset buyers and sellers. Within our Customer Engagement team, Customer Care, the customer service arm, gains valuable insights through buyer feedback, which allows us to improve our strategies, technology or other processes that help buyers achieve their real estate goals.

In any given month, Customer Care fields over 50,000 in-bound calls, makes over 8,000 outbound calls, and coordinates upwards of 10,000 chats and emails from buyers with feedback that is valuable for us to know and share with sellers.

Additionally, Customer Engagement’s VIP buyer team helps 1,200 of the top buying customers, who purchase multiple properties during any given month or year, find the best properties that match their portfolios. Through this approach, we not only help buyers, but also gain ground-level insight around the environment of the local market, property conditions, and more, which we pass along to our sellers in order to help them optimize their strategy and support their decision process with the goal to ensure positive return or outcome.

VIP buyers can range from individuals with lines of bank credit, to private equity firms and institutional buyers, however, each possesses a presence in their local communities.

We believe each interaction with buyers is an opportunity to provide the most accurate and up-to-date information available. This education is not only carried-out through our inbound calls and communications, but also through outreach with our buyers to build awareness and promote properties that may interest them.

This outreach is paired with our “Go Beyond the Question” strategy, which gives us a much more in-depth understanding of what buyers are looking for in properties. Real estate investors, especially newer entrants into the market, are excited to invest, but need information and guidance to help execute a well-formed strategy that ultimately allows them to bid and hopefully win assets in our marketplace.

HW: What is Auction.com’s “Go Beyond the Question” strategy? And how does it help both buyers and sellers?

RB: The “Go Beyond the Question” strategy drives additional questions back to the buyer to help shape their understanding of both the particular property they are interested in as well as the process itself. So whether it’s how the bidding will take place on the site, or how they should consider approaching a valuation model, to considerations when setting their own max bid amount, we work to help make them as “auction ready” as possible so they can be successful.

We are seeing sizeable growth among burgeoning investors who have aspirations of real estate investment and as you might expect, those newer entrants into the market have questions, yet don’t have the experience to know which questions they should be asking about an asset.

We are constantly communicating with buyers, whether face-to-face at a foreclosure sale or concierge event or through inbound requests from buyers that are consistently bidding on – and hopefully winning – assets in our marketplace.

Buying investment through a foreclosure auction or online sale is quite different from the traditional purchase of an investment property and requires buyers to operate in a manner where we look to provide them with as much information as we can and set their expectations in order for them to be successful during the auction event.

The mantra of “Going Beyond the Question” continues to drive our team every day as we strive to help buyers achieve their real estate goals and ‘Bid with Confidence.’

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Falling inventory forces homebuyers to move at fastest pace ever

Housing inventory fell 8.9% from last year in the second quarter of 2017, sending homebuyers scurrying to beat the rising competition.

Housing inventory dropped for nine consecutive quarters, and is currently down a full 20% from inventory levels five years ago, a new report from Trulia shows.

And now, homebuyers are snatching up homes at the fastest pace since Trulia began tracking in 2012. While 57% of homes were still on the market after two months in 2012, today that number shrank down to 47%.

The chart below shows the relationship between housing inventory and the amount of time homes stay on the market.

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Housing inventory

(Source: Trulia)

Competition is so fierce, in fact, that 33% of Americans who bought a home in the last year made an offer without even seeing the home in person, according to a survey from Redfin, an online real estate brokerage.

This is up from 19% of buyers who placed an offer on a home without seeing it first last year. Among Millennials, even more placed offers without seeing the home in person — a full 41%.

And while that survey showed affordable housing was the most prevalent economic concern, only 5% of homebuyers said they would cancel their home-buying plans if rates surpass 5%.

As supply continues to dwindle, a new report from the National Association of Realtors showed pending home sales dropped for the third consecutive month, possibly a sign that low housing supply is beginning to curb demand.

However, while pending home sales showed a decrease the past few months, existing home sales continue to increase, NAR’s report shows.

But the pending home sales report showed the inventory shortages are hitting hardest in the entry-level housing market, which saw decreased home sales of 7.2% from last year while homes priced at over $1 million saw sales increase by 29.1% from last year.

One expert explained the housing inveventory shortage is having a major impact on the market, and relief is nowhere to be seen. 

“Today’s numbers are yet another indication that the lack of homes for sale is having a major, negative impact on the market,” realtor.com Senior Economist Joseph Kirchner said. “The future direction will be brighter if and when we see a significant uptick in inventory, but that unfortunately doesn’t seem to be right around the corner.”

The persistent and disproportional drop in starter and trade-up home inventory is pushing affordability further out of reach of homebuyers, Trulia pointed out in its report. Starter and trade-up homebuyers need to spend 3.1% and 1.7% more of their income than this time last year, whereas premium homebuyers only need to shell out 0.9% more of their income.

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Pending home sales drop for third consecutive month

Supply shortages and rising home prices caused pending home sales to fall in May for the third consecutive month, according to the latest report from the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 0.8% to 108.5 in May, down from a downwardly revised 109.4 in April. This marks a decrease of 1.7% from last year, marking the second consecutive annual decline.

The chart below breaks down the increase by geography. While the South saw an annual decrease in May, its pending home sales are still significantly higher than other regions of the U.S.

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pending sales

(Source: NAR)

“Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales,” NAR Chief Economist Lawrence Yun said.

“Buyer interest is solid, but there is just not enough supply to satisfy demand,” Yun said. “Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

The housing shortages are most sever in lower price ranges and entry-level homes, Yun explained. Sales of homes under $100,000 decreased 7.2% from last year, and sales of homes priced between $100,000 and $200,000 is up just 2% from last year.

However, on the other end of the spectrum, sales of homes priced between $750,000 and $1 million surged 26% and sales of those priced at over $1 million increased even more at 29.1%.

NAR’s Housing Opportunities and Market Experience survey, released Monday, showed less renters think now is a good time to buy a home.

“The lack of listings in the affordable price range are creating lopsided conditions in many areas where investors and repeat buyers with larger down payments are making up a bulk of the sales activity,” Yun said.

“Meanwhile, many prospective first-time buyers can’t catch a break,” he said. “Prices are going up and there’s intense competition for the homes they’re financially able to purchase.”

NAR predicts existing home sales will come in at about 5.63 million this year, an increase of 3.2% from 2016’s 5.45 million. It forecasts the national median existing-home price will increase about 5% this year.

“A much higher share of homeowners compared to a year ago think now is a good time to sell, but until they do, sales will likely stay flat and low inventory will keep price growth moving swiftly,” Yun said.

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Freddie Mac breaks down homeownership gap in Hispanic population

The homeownership rate among Hispanics in the U.S. is significantly lower than non-Hispanic whites, and a new report from Freddie Mac explains why.

The homeownership rate among Hispanics currently stands at about 45%, more than 20 percentage points lower than the rate among non-Hispanic whites. The gap can be traced to differences in age, income, education and other factors, the report showed.

The charts below, which use data from the U.S. Census Bureau, show the trend in Hispanic homeownership since 1994. The chart on the left shows the movement of the Hispanic homeownership rate compared to the rate of the white population, while the chart on the right shows the percentage of the homeownership gap between the two populations.

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Hispanic homeownership

(Source: Freddie Mac, U.S. Census Bureau)

Within the Hispanic population, 66% are U.S. citizens, 11% are permanent residents, 10% are here on temporary visas which could lead to permanent residency and an estimated 13% are undocumented immigrants.

This population is on average 10 years younger than non-Hispanic whites, and the share with a bachelor’s degree is slightly less. The median household income among Hispanics came in at 75% of white median income, the report showed.

This chart shows how much each factor influences the Hispanic homeownership rate. Age proved to be the most important factor. If all other factors are equal, a 35-year old is 15 percentage points more likely to be a homeowner than a 25-year old.

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Hispanic homeownership

(Source: Freddie mac)

Due to the 10-year average age gap between the two populations, age accounts for about seven percentage points of the homeownership rate gap, Freddie Mac’s report shows.

However, about 13% of the gap can’t be explained by difference in age, education and other observable factors.

This chart below shows the age gap between whites and Hispanics is projected to narrow slowly over time. The U.S. Census Bureau expects the average age gap will drop to eight years by 2060.

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Hispanic homeownership

(Sources: Freddie Mac, U.S. Census Bureau)

Due to a number of factors, including a projected increase in Hipsanics born in the U.S., Freddie Mac projected the homeownership gap between Hispanics and whites will decreases slowly over the next several years.

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Hispanic homeownership

(Source: Freddie Mac)

“Most of the White/Hispanic gap can be traced to population differences in the characteristics that influence homeownership in the U.S. – age, English proficiency, income, education, etc.,” Freddie Mac said in its report. “If these differences are reduced in the future, some of the homeownership gap can be eliminated.”

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Home prices climb 5.5% in April

Home prices increased once again in April, according to S&P Dow Jones and CoreLogic’s latest report.

Home prices increased 5.5% in April, slightly slower than last month’s 5.6% increase, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. Census divisions.

The 10-City Composite saw an annual increase of 4.9%, slightly less than last month’s 5.2%, while the 20-City Composite increased 5.7% annually, down from 5.9% in March.

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Case-Shiller

(Source: S&P Dow Jones, CoreLogic)

“As home prices continue rising faster than inflation, two questions are being asked: why? And, could this be a bubble?” said David Blitzer, S&P Dow Jones Indices managing director and Index Committee chairman. “Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up.”

“The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising,” Blitzer said. “At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four-month supply.”

“Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue,” he said.

A recent report from First American Financial Corp. showed affordability reversed course in April, increasing for the first time in months. The study showed the housing market is currently 33% more affordable than the housing boom peak.

Home prices also increased monthly. Before seasonal adjustment, the National Index increased 0.9% in April while the 10-City Composite increased 0.8% and the 20-City Composite increased 0.9%. However, after seasonal adjustment, the gains were much lower at 0.2% for the National Index, 0.2% for the 10-City Composite and 0.3% for the 20-City Composite.

A full 18 of the top 20 cities reported home price increases in April before seasonal adjustment, and 13 cities reported increases after seasonal adjustment.

Seattle, Portland and Dallas saw the highest annual home prices gains in the top 20 cities, with increases of 12.9%, 9.3% and 8.4% respectively.

“The question is not if home prices can climb without any limit – they can’t,” Blitzer said. “Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash.”

“Housing starts are trending higher and rising prices may encourage some homeowners to sell,” he continued. “Moreover, mortgage default rates are low and household debt levels are manageable. Household finances should be able to weather a fairly large price drop.”

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5 ways tiny homes have become luxury homes

(BPT) – Sponsored ad content by Clayton

For decades, it seemed like the name of the game in the United States was if it’s bigger then it will be better. This is a big country; we like big portions, big cars, big homes, big everything. But what’s true for many isn’t true for everyone. In the housing market, some families need a 4,000-square foot home, while others do fine in a two-bedroom condo.

Recently, some bold, stylish families decided to embark on a journey to live in radically downsized dwellings called tiny houses. These 200- to 500-square foot homes are designed to maximize space efficiency and sustainable living, while people get to live in stylish, modern floor plans.

Tiny homes have gone from a niche hobby to a popular way of life. In many ways, they have grown up and become a more refined luxury home. These features of the next generation of tiny homes might get you thinking that bigger isn’t necessarily better.

1. Architectural design

Few people expect to walk into a tiny home and see something they would call luxurious, but that’s exactly what happens when architect Jeffery Dungan brings his clean, modern approach to traditional architectural styles and applies it to tiny homes. Growing out of the tiny house lifestyle, he embraces simplicity to add fresh, invigorating expressions to the homes he creates.

2. Tall, vaulted ceilings

Who says a tiny home needs to be cramped, claustrophobic or a tight squeeze? With the right design, a tiny home can exhibit the same sense of openness found in many luxury homes. Take The Saltbox, by Clayton Tiny Homes. Upon entering this meticulously designed home, the 11-foot-high ceilings and large windows blend the outdoors with the indoor, producing an astonishing sense of depth and space.

3. Designed by the square inch rather than the square foot

Every square foot counts with a tiny home, but many builders want to go even smaller and hone in on the smallest detail. This means installing subway tiles in the bathroom, adding shiplap wood siding or quartz counter tops. It’s no longer just about getting the most out of each square foot, but how to make every square inch remarkable.

4. Built to code

As more people took to the tiny home lifestyle and more of these homes evolve into being professionally designed and developed, they should understand the regulations to which they are built. Clayton tiny homes are built to the International Residential Building Code (IRC) as well as all applicable state and local building codes. These small modular homes are designed for permanent year round living and are permanently affixed to your land.

5. Minimalists living with maximum comfort

Living simply doesn’t mean you have to deprive yourself of certain comforts. With oak floors, top of the line appliances, bathtubs, laundry machines, French doors, dishwashers and full bathrooms, Clayton tiny homes offer all the features you would expect in a much larger home.

To discover more about modern tiny houses, visit the Clayton Designer Series Tiny Homes site and see for yourself why tiny living can also be luxurious living.

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Senior home equity hits all-time high in Q1

Senior homeowners saw an increase in their home equity in the first quarter of 2017, according to a report from the National Reverse Mortgage Lenders Association.

The report showed homeowners aged 62 and older saw their home equity increase by 3.1% to $6.3 trillion in the first quarter. This is up from $6.13 trillion from the fourth quarter.

This growth in housing wealth for seniors was driven by an estimated 2.6%, or $199.3 billion, increase in senior home values, and was offset by a 0.6% increase in senior-held mortgage debt which totaled $9.2 billion.

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senior equity

(Source: NRMLA)

The NRMLA/RiskSpan Reverse Mortgage Market Index, a quarterly measure of home equity held by older homeowners, increased to 227.07 in the first quarter, an all-time high since the index was first published in 2000.

“Older adults who want to stay in their own homes as they age, and we know a majority do, may find that the house that was perfect for raising a family lacks the features to support aging in place,” NRMLA President and CEO Peter Bell said.

“But, instead of moving out, various modifications, such as stairless entryways and wider bathroom doorframes, can be made to accommodate new mobility and accessibility needs,” Bell said. “The housing wealth our seniors have built up in their homes over the years, their home equity, can be used to update the family house into a space for living comfortably and independently for years to come.”

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Texas hot markets begin to see slowdown

The housing market in many Texas metros is slowing down as home sales and home prices grow at a slower rate than the state has seen this year.

New home sales prices in the Dallas-Fort Worth area increased in May, but at a slower pace than previous months, according to the New Home Sales Index released by HomesUSA.com.

The average price of a new home increased from $383,681 in April to May’s $384,489 in the Dallas area, according to the North Texas Real Estate Information Systems.

The number of days on market for new homes sold in the Dallas area increased to 122.02 days, up from 121.62 days the month before.

Other major housing markets in Texas showed the same slowdown seen in the Dallas area. Houston and San Antonio both saw a slowdown in the pace of new home sales in May. The total days on market for new homes in Houston increased from 134.86 days in April to 135.28 days in May.

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dallas DOM

(Source: HomesUSA.com)

San Antonio saw the biggest slowdown in new home sales pace with the largest increase on days on market for the second month in a row. New home days on market increased from 105.98 days in April to 106.92 days in May. Despite this increase, San Antonio remains the lowest among the four biggest new homes sales markets in Texas.

This fast pace is due in part to the city’s average sales price being more than $70,000 lower than the average for the rest of Texas.

However, Austin became the major new home market in Texas to see a faster home sales pace in May for the second month in a row. The number of days on market in Austin decreased in May to 112.67 days, down from 112.73 the month before.

Overall, the four largest new home sales markets in Texas have been slowing their pace since October, the report from HomesUSA.com shows. The average days on market for the four markets increased from 117.58 days in October to 123 days in May.

“New home sales continue to remain strong and prices continue to rise in our Dallas-Ft. Worth area,” HomesUSA.com owner Ben Caballero said. “But we’ve seen the number of days on market increase by about a week since the fall, as demand is not quite keeping up with new inventory.”

But while new home sales may be slowing in Texas, Dallas remains one of the hottest markets this home-buying season.

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New home sales reverse course, increase in May

New home sales increased in May, partially reversing the previous month’s decrease, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Sales of new single-family homes in May increased to a seasonally adjusted annual rate of 610,000 home sales, the report showed. This is an increase of 2.9% from April’s 593,000 and is 8.9% above last year’s 560,000 sales.

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Home sales

(Source: HUD, U.S. Census Bureau)

The median sales price of new homes sold increased from last month’s $309,200 to $345,800 in May. The average sales price for new homes sold came in at $406,400 for the month.

The seasonally adjusted estimate of new homes for sale at the end of May came in at 268,000 homes, the same as the previous month. However, with the faster sales pace, this represents a 5.3-month supply, down from April’s 5.7 months.