Existing home sales were on the rise for the month of May after going down slightly in April, according to the latest report from the National Association of Realtors (NAR).
May also saw a nice little increase in home values, pushing prices to a new high. The increase is mainly due to the lack of inventory for home buyers which correlates with the current supply and demand issues. Less supply equates to more demand and rising values.
The NAR said that the average price in May for all housing types reached a new peak at $252,800. Higher than June’s $247,600, and 5.8% higher than May 2016 median price of $238,900 and marks the 63rd straight month of year-over-year gains.
An interesting note is that NAR chief economist, Lawrence Yun had said, “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.”
Housing inventory increased 2.1% in May to 1.96 million existing homes available for sale but is still down by 8.4% from a year ago which was at 2.14 million homes, and has fallen for the 24th month in a row. The current supply is at a 4.2-month supply at the current sales pace, which is a decrease from 4.7 months a year ago.
The NAR said that all major regions except for the Midwest saw an increase in sales for May.
The Northeast saw the biggest gains with a 6.8% gain to an annual rate of 780,000, and are now 2.6% above a year ago. The Northeast saw the median price was $281,300, which is an increase of 4.7% from May 2016.
Existing sales dropped 5.9% to an annual rate of 1.28 million in May, and are 0.8% below a year ago. The median price in the Midwest was $203,900, up 7.3% from a year ago.
The South saw existing-home sales increase 2.2% to an annual rate of 2.34 million, and are 4.5% above May 2016. The median price in the South was $221,900, up 5.3% from a year ago.
Existing-home sales in the West increased 3.4% to an annual rate of 1.22 million in May, and are now 3.4% above a year ago. The median price in the West was $368,800, up 6.9% from May 2016.
Yun added, “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.”