WASHINGTON (STL.News) – Existing-home sales rebounded in May, recording an increase in sales for the first time in two months, according to the National Association of Realtors®. Each of the four major U.S. regions saw a growth in sales, with the Northeast experiencing the biggest surge last month.
Total existing-home sales1, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 2.5% from April to a seasonally adjusted annual rate of 5.34 million in May. Total sales, however, are down 1.1% from a year ago (5.40 million in May 2018).
Lawrence Yun, NAR’s chief economist, said the 2.5% jump shows that consumers are eager to take advantage of the favorable conditions. “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”
The median existing-home price2 for all housing types in May was $277,700, up 4.8% from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.
Total housing inventory3 at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7% increase from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, up from both the 4.2 month supply in April and from 4.2 months in May 2018.
Though inventory is up, the months’ supply numbers remain near historic lows, which has a direct effect on price, according to Yun. “Solid demand along with inadequate inventory of affordable homes have pushed the median home price to a new record high,” he said.
Properties remained on the market for an average of 26 days in May, up from 24 days in April and equal to the 26 days in May of 2018. Fifty-three percent of homes sold in May were on the market for less than a month.
Given that housing and properties have been selling so quickly, Yun continues his call for new construction. “More new homes need to be built,” he said. “Otherwise, we risk worsening the housing shortage, and an increasingly number of middle-class families will be unable to achieve homeownership.”
Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in May were Rochester, N.Y.; Fort Wayne, Ind.; Lafayette-West Lafayette, Ind.; Boston-Cambridge-Newton, Mass.; and Midland, Texas.
According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 4.07% in May, down from 4.14% in April. The average commitment rate across all of 2018 was 4.54%.
“The month of May ushered in the home sales upswing that we had been expecting,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. “Sales are strengthening in all regions while we see price appreciation for recent buyers.”
First-time buyers were responsible for 32% of sales in May, unchanged from the 32% the month prior and up from the 31% recorded in May 2018. NAR’s 2018 Profile of Home Buyers and Sellers — released in late 20184 — revealed that the annual share of first-time buyers was 33%.
All-cash sales accounted for 19% of transactions in May, down from April and a year ago (20% and 21%, respectively). Individual investors, who account for many cash sales, purchased 13% of homes in May, down from 16% in April and from 14% a year ago.
Distressed sales5 — foreclosures and short sales — represented 2% of sales in May, down from 3% in April and from 3% in May 2018. Less than 1% of May 2019 sales were short sales.
Single-family and Condo/Co-op Sales
Single-family home sales sat at a seasonally adjusted annual rate of 4.75 million in May, up from 4.63 million in April and down 0.8% from 4.79 million a year ago. The median existing single-family home price was $280,200 in May, up 4.6% from May 2018.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 590,000 units in May, up 1.7% from the prior month and down 3.3% from a year ago. The median existing condo price was $257,100 in May, which is up 5.4% from a year ago.
May existing-home sale numbers in the Northeast increased 4.7% to an annual rate of 670,000, about equal to a year ago. The median price in the Northeast was $304,100, up 6.6% from May 2018.
In the Midwest, existing-home sales jumped 3.4% to an annual rate of 1.22 million, which is 3.9% below May 2018 levels. The median price in the Midwest was $220,500, an increase of 5.6% from a year ago.
Existing-home sales in the South grew 1.8% to an annual rate of 2.32 million in May, up 1.3% from a year ago. The median price in the South was $241,400, up 3.6% from a year ago.
Existing-home sales in the West grew 1.8% to an annual rate of 1.13 million in May, 3.4% below a year ago. The median price in the West was $409,100, up 4.1% from May 2018.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample — about 40% of multiple listing service data each month — and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.
3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).
4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.
5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.
NOTE: NAR’s Pending Home Sales Index for May is scheduled for release on June 27, and Existing-Home Sales for June will be released July 23; release times are 10:00 a.m. ET.