Sales of newly built, single-family homes fell 7.8 percent to a seasonally adjusted annual rate of 626,000 units in May, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

On a year-to-date basis however, new home sales for 2019 are 4 percent higher than the same period in 2018.

“The report shows growth in sales in the $200,000-300,000 price range, which indicates middle-class demand for housing, is being supported by low rates and solid employment,” Greg Ugalde, chairman of the National Association of Home Builders (NAHB), said in the report.

A new home sale occurs, according to the report, when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the May reading of 626,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 333,000 in May, representing a 6.4 months’ supply. The median sales price was $308,200. The median price of a new home sale a year earlier was $316,700.

“The May numbers are a bit surprising given lower mortgage interest rates and solid builder confidence data,” NAHB Chief Economist Robert Dietz said. “Based on these conditions, we expect June new home sales figures will show a rebound.”

Regionally, and on a year to date basis, new home sales are 7.5 percent higher in the South and 3.4 percent higher in the West. Sales are down 13.3 percent in the Northeast and 3.2 percent in the Midwest.