Demand for new homes went bonkers in May.

Sales surged 18.6% to an annualized rate of 504,000 units.

Economists were forecasting a 439,000 pace.

According to the report, the median sales price for homes sold during the month was $US282,000. The average price was $US319,200.

“The seasonally adjusted estimate of new houses for sale at the end of May was 189,000,” reported the Census Bureau. “This represents a supply of 4.5 months at the current sales rate.”

From the report:

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