Existing Home Sales Rising in May
The National Association of Realtors has issued their report on existing-home Sales. The report finds that sales for existing homes rose at their highest monthly growth rate in years during the month of May. This is in addition to continued inventory expansion. According to The National Association of Realtors, existing home sales represent completed transactions of single-family homes, townhomes, condominiums, and co-ops. These completed transactions jumped 4.9 percent during the month of May. This was the biggest month-over-month increase since August 2011. When looking at single-family transactions, sales increased 5.7 percent.
“Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” said NAR chief economist Lawrence Yun. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.” Compared to last year, sales remained down 5 percent. This is reflecting an environment with higher-cost inventory that has driven out potential home owners. The median existing-home price in May was $213,400. This is a 5.1 percent increase from 2013. The median single-family home price in May was $213,600.
Increased supply has driven home price gains down over the past six months. During May, total housing inventory available for sale was up 2.2 percent to 2.28 million existing homes. The National Association of Realtors states that although this is an improvement over last year, current home inventories are still below the ideal amount for a balanced market. Lack of construction is cited as the main problem, with housing starts falling far short of employment gains in many areas across the country.
The National Association of Realtors president, Steve Brown, stated “The temporary pause in rising interest rates and more homes for sale is good news—especially for first-time home buyers—who likely have a better chance in upcoming months to make a competitive offer that’s in return accepted by the seller”.