The National Association of Realtors (NAR) is reporting an increase in existing home sales of 1.1% in May, which is a positive adjustment from April which saw a decrease in sales. Total existing home sales is defined as completed transactions that include single-family homes, townhomes, condominiums and co-ops. The annual rate of home sales increased to 5.62 million which is ahead of the seasonally adjusted rate from April at 5.56 million.
Lawrence Yun, NAR chief economist, says
“sales activity expanded in May as more buyers overcame the increasingly challenging market conditions prevalent in many areas. “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 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.”
Inventory rose 2.1% in May to 1.96 million homes. This is lower than the same period last year where there were 2.14 million available homes, a decrease of 8%. As a result of decreased inventory, the median home sales price increased nationwide to $252,800. This may be affecting overall sales and deflating the market according to Yun. He states that “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”. House price gain may also be affected by the 16 year low unemployment rate.
Of significance in the Northeast the May figures saw an increase of 6.8 percent to an annual rate of 780,000, and are now 2.6 percent above a year ago. The median price in the Northeast was $281,300, which is 4.7 percent above May 2016. Existing home sales for properties listed between $500,000-$750,000 increased 20.6% from the same period last year. It increased 30.3% for properties listed between $750,000-$1,000,000 and 32.1% for properties listed above $1,000,000. The New York City region would attribute significantly to this increase.