U.S. new home sales surge in May

U.S. new home sales surged 10.7% in May from a month earlier. It's kind of hard to understand how this happens. First of all, US property prices are not cheap. The average property price in May is now US$449,000, up 15% year-on-year. Secondly, the 30-year fixed-rate mortgage rate in the United States is now close to 6%, which should greatly reduce the purchase intention of prospective home buyers. Third, according to figures from the US Department of Commerce, the supply of new buildings in the US reached 444,000 in May, the most since May 2008. All of the above can be regarded as negative property market factors. However, the strength of new home sales in May could also be the result of a rebound after four straight months of declines. Coupled with the rising mortgage interest rates in the United States, forcing prospective home buyers to enter the market as soon as possible to lock in mortgage interest rates may also be one of the reasons to support the property market.