WASHINGTON – Sales of existing homes nationwide rose 2.0 percent in May to a seasonally adjusted rate of 4.99 million units per year, after falling 1 percent in April to 4.89 million units per year, based on data released today by the National Association of Realtors. Compared with the year-ago pace of 5.93 million units per year, sales fell 15.9 percent.
“Homebuyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” said NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif.
Analysts had expected a more modest rise – to 4.95 million units per year, an increase of 1.2 percent – based on the median forecast from a Bloomberg News survey of 72 economists. April’s pace tied the previous record low in the NAR survey, whose data date back to 1999. (READ MORE)
Sales rose last month in the Northeast to an annual pace of 910,000, 4.6 percent faster than the April rate. Existing home sales also rose in May in the Midwest (5.5 percent) and the West (2.0 percent), but dipped in the South (-0.5 percent) compared with April.
Compared with the same month a year ago, existing-home sales fell 17.5 percent nationwide and 15.0 percent in the Northeast. Year-over-year declines in sales also were seen in the other three regions. Meanwhile, single-family home sales in Rhode Island fell 15 percent compared with a year ago, the Rhode Island Association of Realtors said in a separate report. (READ MORE)
The nation’s housing inventory fell 1.4 percent compared with April – to 4.49 million existing units at the end of May – after surging 10.5 percent the month before. Compared with a year ago, the housing inventory grew by 2.4 percent.
At the current pace of sales, that represented a 10.8-month supply, a 3.6-percent decline from April’s record 11.2-month supply, but an increase of 21.3 percent compared with the 8.9-month supply at the end of May 2007. It remains at about twice the level the Realtors consider typical of a stable market, Bloomberg noted.
“The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” Lawrence Yun, the NAR’s chief economist, wrote in today’s report.
“Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets,” he added. But, Yun said, “foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”
The median price of all existing homes sold last month nationwide was $208,600, an increase of 3.1 percent compared with April but a decline of 6.3 percent from a year ago, the NAR said
In the Northeast, the median price of existing single-family homes last month was $278,000, an increase of 6.1 percent over the month but a decline of 2.4 percent compared with May 2007. Prices rose last month in the other three regions but fell compared with April 2007.
“[It would] be premature to say the improvement marks a turnaround,” Yun said. “The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”
“I think we are close to a bottom,” Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, told Bloomberg Television. “Sales will probably fall another 5 percent or 10 percent before bottoming by the end of the summer.” But, she said, “It will be a feeble recovery: We will kind of bounce along the bottom.”
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.
