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May Existing-Home
Sales on the Rise

Sales of existing homes reached a seasonally adjusted annual rate of 4.89 million units in May, increasing 4.9 percent from an upwardly revised 4.66 million in April. Sales remain 5.0 percent below the 5.15 million-unit level in May 2013. The 4.9 percent month-over-month gain in May was the highest monthly improvement since the 5.5 percent increase in August 2011.

Existing-home sales rose 4.9 percent in May, and inventory gains continued to help moderate price growth, according to a June 23 report from the National Association of Realtors (NAR). All four regions of the country experienced sales gains compared to a month earlier.

Total housing inventory at the end of May climbed 2.2 percent to 2.28 million existing homes available for sale, which represents a 5.6-month supply at the current sales pace, down slightly from 5.7 months in April. Unsold inventory is 6.0 percent higher than a year ago, when there were 2.15 million existing homes available for sale.

"Home buyers are benefiting from slower price growth due to the much-needed rise in inventory levels seen since the beginning of the year," said NAR chief economist Lawrence Yun. "Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates."

The median existing-home price for all housing types in May was $213,400, which is 5.1 percent above May 2013. "Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market," Yun said. "Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run."

Earlier this month, NAR reported new home construction activity is currently insufficient in most of the U.S., and some states could face persistent housing shortages and affordability issues unless housing starts increase to match up with local job creation.

The percent share of first-time buyers continued to underperform, representing just 27 percent of all buyers in May, down from 29 percent in April; they were 29 percent of the market in April 2013 as well.

"Many potential buyers were left on the sidelines beginning last summer, as affordability declined amidst rising home prices and interest rates," NAR President Steve Brown said. "The temporary pause in rising interest rates and more homes for sale is good news - especially for first-time home buyers - who likely have a better chance in upcoming months to make a competitive offer that's in return accepted by the seller."

The median time on market for all homes was 47 days in May, down from 48 days in April; it was 41 days on market in May 2013. Short sales were on the market for a median of 125 days in May, while foreclosures typically sold in 57 days and non-distressed homes took 44 days. Forty-one percent of homes sold in May were on the market for less than a month.

Single-family home sales rose 5.7 percent to a seasonally adjusted annual rate of 4.30 million in May from 4.07 million in April, but remain 5.7 percent below the 4.56 million pace a year ago. Existing condominium and co-op sales remained unchanged in May from April (as well as May 2013) at an annual rate of 590,000 units.

Regionally, existing-home sales in the Northeast rose 3.3 percent to an annual rate of 620,000 in May, but are 3.1 percent below a year ago. In the Midwest, existing-home sales jumped 8.7 percent to an annual rate of 1.13 million in May, but are still 7.4 percent below May 2013. Sales in the South increased 5.7 percent to an annual level of 2.05 million in May, but are down 0.5 percent from May 2013; sales in the West rose 0.9 percent to an annual rate of 1.09 million in May, and are 11.4 percent below a year ago.

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October 17, 2019, 9:41 am PDT

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