Existing Home Sales Bounce Back in May

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – ROSE 2.5 percent, 130,000, in May to a seasonally adjusted annual sales rate of 5.34 million;
  • Median price of an existing single-family home ROSE 4.0 percent, $10,800, to $277,700;
  • Year-year the median price is up 4.8 percent or $12,600;
  • Number of homes available for sale ROSE 90,000 or 4.9 percent to 1.92 million;
  • The months’ supply of homes for sale in May EDGED UP 0.1 months to 4.3 months.

Trends:

  • The May increase in closings was only the third monthly gain in the last 14 months; the April sales pace was revised up 20,000 to 5.21 million, matching March;
  • The May sales pace is the strongest since last July (5.34 million);
  • Year-year sales were DOWN 1.3 percent, the 15th consecutive month in which year-year sales have dropped;
  • The median price of an existing single-family home ROSE for the fourth straight month;
  • The month-month increase in homes for sale marked the fifth straight monthly increase in inventory.

Data Source: National Association of Realtors (NAR)

Image result for home sales

Realtors breathed a collective sigh in May as the pace of closings on existing single-family homes improved, tracking the boost in pending home sales two months ago. But, with pending hoe sales (contracts) having fallen in April, the increase in sales could prove to be temporary.

Sill the positive word for the housing market could prove to be good news not only for realtors but for furniture and appliance retailers.

And, despite the slowdown in the pace of sales contracts, the 4.8 percent boost in the median price of an existing home helped bring more homes onto the market. Realtors had been complaining about the paucity of inventory, citing it as one of the reasons for weak sales. While buyers may “settle” in the purchase of other items, a home may be too big of an investment.

After falling for six straight months from July through December last year, the number of homes on the market has increased each month this year. Year over year, the number of homes for sale has increased for 10 straight months.

The boost in inventory – if it translates into sales – could flip other housing statistics which show that while the homeownership rate for older Americans – 65-plus – fell only slightly in the first quarter, (to 78.5 percent in 1Q 2019 from 78.8 percent in 4Q 2018), the homeownership rate for younger Americans — under 35 – dropped 1.1 percentage points to 35.4 percent, the lowest in a year.

Home buyers have taken advantage of lower mortgage rates. The average rate for a 30-year fixed rate loan has fallen from 4.94 percent last November to 3.82 percent last week. That change reduces the monthly payment on a 30-year $300,000 loan by almost $198 per month.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

0 Responses to “Existing Home Sales Bounce Back in May”


  • No Comments

Leave a Reply