Sales of US existing homes rebounded in May having declined in April, with low inventory levels helping to increase the median sales price to a new high while the median number of days a home is on the market reached a new low according to a press release from the National Association of Realtors.
All major regions saw an increase last month except for the Midwest. The total number of US existing home sales which are completed transactions for condominiums, co-op’s, townhomes and single-family homes increased 1.1%, reaching a seasonally adjusted annual rate of 5.62 million in May compared to 5.56 million in April. The sales pace for May was 2.7% higher than a year ago and is the third highest over the past year.
NAR chief economist Lawrence Yun said that sales activity expanded last month as more buyers overcame the increasingly challenging market conditions in many areas. “The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” said Yun. “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”
Last month the median US existing home price for all to housing types was $258,800 up from last June’s high of $247,600. This is an increase of 5.8% from May last year and is the 63rd consecutive month of year over year gains. Total housing inventory at the end of May increased by 2.1% to 1.96 million existing homes for sale, but this is still 8.4% lower than a year earlier and has declined year-on-year for 24 consecutive months. There is now a 4.2 months’ supply of unsold inventory at the current sales pace, down from 4.7 months a year earlier.
According to Lawrence Yun, “Home prices keep chugging along at a pace that is not sustainable in the long run. Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability concerns.”
In May properties were typically on the market for just 27 days, down from 29 days in April and 32 days a year earlier. Short sales took the longest to sell at a median of 94 days while foreclosures took 48 days. Some 55% of homes sold in May were on the market for less than a month.