Property sales in the US crept up again in May, prices still rising
Existing home sales in the United States rebounded in May, up by 2.5% month on month and the first increase in two months, according to the latest index from real estate agents.
Each of the four major regions covered by the data from the National Association of Realtors recorded a growth in sales, with the Northeast experiencing the biggest rise. But total sales are down by 1.1% compared with May 2018.
Lawrence Yun, NAR’s chief economist, said that the 2.5% jump shows that consumers are eager to take advantage of the favourable conditions. ‘The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,’ he explained.
The data also shows that the median existing home price for all housing types in May was $277,700, up 4.8% from May 2018 and the 87th straight month of year on year gains.
Total housing inventory at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7% increase from 1.87 million a year ago. Unsold inventory is at a 4.3 month supply at the current sales pace, up from both the 4.2 month supply in April and from 4.2 months in May 2018.
Though inventory is up, the months’ supply numbers remain near historic lows, which has a direct effect on price, according to Yun. ‘Solid demand along with inadequate inventory of affordable homes have pushed the median home price to a new record high,’ he said.
Given that housing and properties have been selling so quickly, Yun continued his call for new construction. ‘More new homes need to be built. Otherwise, we risk worsening the housing shortage, and an increasingly number of middle-class families will be unable to achieve homeownership,’ he pointed out.
A breakdown of the figures shows that in May existing home sales in the Northeast increased 4.7% to an annual rate of 670,000, about equal to a year ago. The median price in the Northeast was $304,100, up 6.6% from May 2018.
In the Midwest, existing home sales jumped 3.4% to an annual rate of 1.22 million, which is 3.9% below May 2018 levels. The median price in the Midwest was $220,500, an increase of 5.6% from a year ago.
Existing home sales in the South grew 1.8% to an annual rate of 2.32 million in May, up 1.3% from a year ago. The median price in the South was $241,400, up 3.6% from a year ago.
And in the West existing home sales increased by 1.8% to an annual rate of 1.13 million in May, 3.4% below a year ago. The median price in the West was $409,100, up 4.1% from May 2018.