WASHINGTON, DC—Existing-home sales were looking up again in May following a drop in April, the National Association of Realtors said Wednesday. The metric was closely watched not only as an indicator of the residential market but also of the the health of the economy as a whole.
NAR data, which include for-sale apartments along with single-family homes, showed that completed transactions rose in May to a seasonally adjusted annual rate of 5.62 million units. May's tally was up 1.1% from April and 2.7% year over year.
Meanwhile, the median sale price for all existing-home types was pushed up by short supply to $252,800. $252,800. The median surpasses last June's figure of $247,600 as the new peak. It's up 5.8% from a year ago and represents the 63rd consecutive month of Y-O-Y gains.
Although total housing inventory rose 2.1% in May, it's still down 8.4% Y-O-Y. “Home prices keep chugging along at a pace that is not sustainable in the long run,” says Lawrence Yun, chief economist at NAR. “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.”
New supply isn't likely to pose immediate relief. The federal government reported earlier this month that housing starts in May fell 5.5% from April to a seasonally adjusted annual rate of 1.09 million units, marking the third consecutive month of declines.
That being the case, Yun says May's sales activity showed buyers overcoming the increasingly challenging market conditions of many regions of the US. “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,” he says. “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.”
NAR data show that single-family home sales increased 1.0% to a seasonally adjusted annual rate of 4.98 million in May from 4.93 million in April, and are now 2.7% above the 4.85 million pace a year ago. The median existing single-family home price was $254,600 in May, up 6.0% from the year-ago period.
Existing condominium and co-op sales climbed 1.6% to a seasonally adjusted annual rate of 640,000 units in May, up 3.2% from a year ago. The median existing condo price in May was $238,700, up 4.8% Y-O-Y.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
