US new-home sales jumped nearly 17% in May, more than economists expected, as buyers rushed back to the market

• US new-home sales surged 16.6% in May from April, to an annualized pace of 676,000, the Census Bureau said Tuesday.
• Economists surveyed by Bloomberg had expected a jump to an annualized rate of 640,000. In addition, the May rate is nearly 13% higher than the same month one year ago.
• Homebuyers are flocking back to the housing market after months-long coronavirus pandemic lockdowns, fueled by low mortgage rates.

Homebuyers are rushing back to the housing market fueled by record-low mortgage rates as the economy reopens from months-long lockdowns to contain coronavirus.

Sales of new single-family homes jumped 16.6% in May from April, to a seasonally adjusted annualized pace of 676,000, the Census Bureau reported Tuesday. The median economist estimate was for 640,000, according to Bloomberg data.

In addition to a larger-than-expected monthly surge, May sales were nearly 13% higher than a year ago. As the US economy reopens, people are flocking back to the housing market in droves — the rosy sales are a rebound from three months of declines ending in April.

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Record-low mortgage rates have helped fuel the rebound in housing activity, and new properties are in high demand because of a shortage in existing homes for sale.

"The housing market has held on relatively well during this service sector recession as would-be buyers have taken advantage of incredibly low mortgage rates, despite only viewing the homes online in many cases," said Yelena Maleyev, associate economist at Grant Thornton.

Purchases in the South, the largest housing market in the country, jumped 15.2% in May, according to the report, a seven-month high. Sales in the West surged 29%, the fastest pace in three months, according to government data.