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This morning the Commerce Department announced that May’s New Home Sales increased 2.1% over April to an annualized rate of 1.298 million units. They also issued a revised number for April New Home Sales of 1.271 million units.

“Mortgage rates that remain anchored at near 40-year lows are continuing to fuel strong demand for housing and show no signs of abating,” said Bob Walters, Chief Economist for Quicken Loans. “May’s New Home Sales report showed strong gains and follows yesterday’s report that the pace of existing homes sold in May was the second strongest level on record. Given the lag effect between home sales and changing interest rates, next month’s numbers should be even more robust, considering the recent rate drop.”

“Home sales continue to defy earlier forecasts that called for a slow down in housing,” he continued. “As long as the employment picture continues to brighten and borrowing costs remain low, the strong demand for housing should continue. The current rate environment is particularly welcome news to home buyers as we enter the summer months, which traditionally have been the most popular time of year for home buyers.”

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