In May, existing home sales rose for the first time since March, according to the latest report from the National Association of Realtors.
Total existing home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – climbed 2.5% from April to a seasonally adjusted rate of 5.34 million in May. Sales were 1.1% below May 2018’s rate.
NAR Chief Economist Lawrence Yun said the 2.5% jump shows consumers are eager to take advantage of favorable conditions.
“The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,” Yun said.
The median existing home price for all housing types increased to $277,700, a gain of 4.8% from last May’s rate of $265,100. This marks the 87th straight month of year-over-year gains.
Total homes available for sale increased from April, moving forward from 1.83 million existing homes on the market to 1.92 million in May. This is a 2.7% increase from last year’s total of 1.87 million.
Unsold inventory was a 4.3-month supply at the current sales pace, up from last month’s 4.2 and up from May 2018’s 4.2 months.
Although inventory has increased, Yun said May’s supply numbers remain near historic lows, which has a direct effect on price.
“Solid demand along with inadequate inventory of affordable homes have pushed the median home price to a new record high,” Yun said.
Properties stayed on the market an average of 26 days in May, rising from 24 days in April and equal to the 26 days in May 2018. The report states that 53% of homes stayed on the market for less than a month.
Given that housing and properties have been selling so quickly, Yun continues his call for new home construction.
“More new homes need to be built,” Yun said. “Otherwise, we risk worsening the housing shortage, and an increasing number of middle-class families will be unable to achieve homeownership.”
The report shows that the average commitment rate for a 30-year, conventional, fixed-rate mortgage retreated from 4.14% in April to 4.07% in May and the average commitment rate for all of 2018 was 4.54%, according to Freddie Mac.
First-time buyers comprised 32% of sales in May, holding steady from April’s rate but up from last May’s rate of 31%. NAR revealed that the annual share of first-time buyers held steady at 33%.
Single-family homes increased from a seasonally adjusted annual rate of 4.63 million in April to 4.75 million in May, which is 0.8% below 4.79 million a year ago. The median existing single-family home price was $280,200 in May, increasing 4.6% from May 2018.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 590,000 units in May, moving forward 1.7% from April, but still down 3.3% from a year ago. The median existing condo price was $257,000 in May, increasing 5.4% from 2018.
“The month of May ushered in the home sales upswing that we had been expecting,” NAR President John Smaby said. “Sales are strengthening in all regions while we see price appreciation for recent buyers.”
Existing home sales in the Northeast rose 4.7% from last month’s rate to an annual rate of 670,000, which is nearly equal to a year ago. The median price in the Northeast increased 6.6% from May 2018 and came in at $304,100.
In the Midwest, existing-home sales gained 3.4% from the prior month at an annual rate of 1.22 million, which is 3.9% below May 2018’s level. The median price in the Midwest was $220,500, increasing 5.6% from a year ago.
Southern existing-home sales grew 1.8% to an annual rate of 2.32 million in May. This is up 1.3% from last year. The median price in the South rose to $241,400, increasing 3.6% from May 2018.
Lastly, existing home sales in the West grew 1.8% to an annual rate of 1.13 million in May, which is a 3.4% below May 2018. The median price in the West was $409,100, increasing 4.1% from this time last year.
