Existing Home Sales Rise More than Forecast, Prices Hit New High

The National Association of Realtors (NAR) said Wednesday that existing home sales rose 1.1% in May, while median sales prices hit a new high. Existing home sales rose to a seasonally adjusted annual rate of 5.62 million in May, up from a downwardly revised 5.56 million in April.

May’s sales pace is 2.7% higher than it was a year ago and is the third highest over the past year.

“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,” Lawrence Yun, NAR chief economist said. “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.”

The median existing home price for all housing types in May came in at $252,800, topping the high measured last June ($247,600) and up 5.8% from May 2016 ($238,900). This marks the 63rd straight month of year-over-year gains, but indications are that it will not last.

“Home prices keep chugging along at a pace that is not sustainable in the long run,” Mr. Yun added. “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.”

Regionally, the South leads the nation in existing home sales, up 2.2% on the month and 4.5% on the year to a 2.340 million rate. The West was up 3.4% to 1.220 million for the month and a 3.4% from last year. The Northeast, which had been lagging behind in the housing market and job market, is finally beginning to show improvement.

The region is up 6.8% on the month and 2.6% on the year at a 780,000 rate.

The Midwest was the only region in May that was negative, down 5.9% on the month and 0.8% on the year at 1.280 million.

“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month,” said Mr. Yun.