Existing home sales in the United States rebounded in May following a notable decline in the previous month while median prices reached a new high, the latest index shows.
Low inventory levels helped keep prices high and also pushed down the median days a home is on the market to a new low, according to the data from the National Association of Realtors.
All major regions except for the Midwest saw an increase in sales last month and overall transactions were up 1.1% to a seasonally adjusted annual rate of 5.62 million in May, some 2.7% above a year ago and the third highest over the past year.
According to Lawrence Yun, NAR chief economist, sales activity expanded in May as more buyers overcame the increasingly challenging market conditions prevalent 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. 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,’ he explained.
The index also shows that the median existing home price for all housing types in May was $252,800, up 5.8% from May 2016 and marks the 63rd straight month of year on year gains.
Total housing inventory at the end of May rose 2.1% to 1.96 million existing homes available for sale but is still 8.4% lower than a year ago and has fallen year on year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago.
‘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 conditions,’ Yun pointed out.
A breakdown of the figures show that sales in the Northeast jumped 6.8% and are now 2.6% above a year ago with a median price of $281,300, some 4.7% above May 2016.
In the Midwest sales fell 5.9% and are still 0.8% below a year ago. The median price in the Midwest reached $203,900, up 7.3% from a year ago.
Sales in the South rose 2.2% and are now 4.5% above May 2016. The median price in the South was $221,900, up 5.3% from a year ago.
And in the West sales increased by 3.4% and are now 3.4% above a year ago. The median price in the West was $368,800, up 6.9% from May 2016.
