Total existing-home sales rose 1.1% to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April, the National Association of Realtors reported Wednesday. Last month’s sales pace is 2.7% above a year ago and is the third highest of the past year.
The median existing-home price for all housing types in May was $252,800. This surpasses last June ($247,600) as the new peak median sales price, is up 5.8% from May 2016 ($238,900) and marks the 63rd straight month of year-over-year gains.
Single-family home sales increased 1.0% to a seasonally adjusted annual rate of 4.98 million in May from 4.93 million in April, and are now 2.7% above the 4.85 million pace a year ago. The median existing single-family home price was $254,600 in May, up 6.0% from May 2016.
Existing condominium and co-op sales climbed 1.6% to a seasonally adjusted annual rate of 640,000 units in May, and are 3.2% higher than a year ago. The median existing condo price was $238,700 in May, which is 4.8% above a year ago.
May existing-home sales in the Northeast jumped 6.8% to an annual rate of 780,000, and are now 2.6% above a year ago. The median price in the Northeast was $281,300, which is 4.7% above May 2016.
In the Midwest, existing-home sales fell 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.
Existing-home sales in the South rose 2.2% to an annual rate of 2.34 million, and are now 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.
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.”
Total housing inventory at the end of May rose 2.1% to 1.96 million existing homes available for sale, but is still 8.4% lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago.
“Home prices keep chugging along at a pace that is not sustainable in the long run,” added Yun. “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.”
Properties typically stayed on the market for 27 days in May, which is down from 29 days in April and 32 days a year ago; this is the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 94 days in May, while foreclosures sold in 48 days and non-distressed homes took 27 days. 55% of homes sold in May were on the market for less than a month (a new high).
Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in May were Seattle-Tacoma-Bellevue, Wash., 20 days; San Francisco-Oakland-Hayward, Calif., 24 days; San Jose-Sunnyvale-Santa Clara, Calif., 25 days; and Salt Lake City, Utah and Ogden-Clearfield, Utah, both at 26 days.
“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 Yun.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased for the second consecutive month, dipping to 4.01% in May from 4.05% in April. The average commitment rate for all of 2016 was 3.65%.
First-time buyers were 33% of sales in May, which is down from 34% in April but up from 30% a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35%.
All-cash sales were 22% of transactions in May, up from 21% in April and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 16% of homes in May, up from 15% in April and 13% a year ago. 64% of investors paid in cash in May.
Distressed sales – foreclosures and short sales – were 5% of sales in May, unchanged from April and down from 6% a year ago. Four% of May sales were foreclosures and 1% were short sales. Foreclosures sold for an average discount of 20% below market value in May (18% in April), while short sales were discounted 16% (12% in April).