The numbers: U.S. new home sales rose 10.7% to a seasonally-adjusted rate of 696,000 in May, from a sharply revised 629,000 in the prior month, the Commerce Department reported Friday.
Analysts polled by the Wall Street Journal had forecast new home sales to come in at 587,000 in May from the initial estimate of 591,000.
Year-over-year, new home sales are down 5.9%.
Key details: The median sales price of new homes sold in May fell to $449,000 from a record high $454,700. The supply of new homes for sale fell 7.2% between April and May, equating to a 7.7-month supply.
Big picture: The housing sector is in the midst of a slowdown, with mortgage rates soaring past 5.8% for a 30-year fixed-rate mortgage. Inventory remains tight with the number of homes on the market rising at a glacial pace, and sales of homes are down overall.
Market reaction: The Dow Jones Industrial Average DJIA, +1.92% and the S&P 500 SPX, +2.21% were both sharply higher in early trading on Friday. The yield on the 10-year Treasury note TMUBMUSD10Y, 3.081% inched down to 3.08%.