Markets

Home sales rose in May but buyers face sharply rising prices

Home sales rose in May but buyers face sharply rising prices

"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", Yun said.

Sales edged up 1.1 percent in May to a seasonally adjusted annual rate of 5.62 million, a decent gain amid a relatively stable job market with a robust 4.3 percent unemployment rate.

Compared with a year earlier, sales were up 2.7% in May.

NAR said there were 1.96 million existing homes available for sale at the end of May, up 2.1% from the end of April but still 8.4% lower than a year ago. The latest data recorded that homes stayed on the market for 27 days from 32 days a year ago and the lowest level since at least 2011.

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). The median home sales price in the Midwest was $203,900, which is 7.3 percent higher than past year.

Industry observers point to the current tight labor market as well the high volume of housing held by investors as reasons for the failure of supply to keep pace with demand. On average, foreclosures and short sales sold for discounts of 20% and 16%, respectively.

Single family home sales rose by 1.0% to an annual rate of 4.98 million, and existing condominium and co-op sales climbed by 1.6% to a rate of 640,000.




Economists surveyed by The Wall Street Journal had expected a 0.5% decline to a 5.54 million annual pace; April sales were revised down slightly.

In the South, existing-home sales rose 2.2 percent to an annual rate of 2.34 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 Yun.

Median price: $221,900, a 5.3 percent year-over-year increase. And 33% of sales last month were from first-time buyers.

Median price: $368,800, an 6.9 percent year-over-year increase.

U.S. bond yields have moved lower over the past few weeks with 10-year rates at 7-month lows which should help underpin demand.


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