Home sales up in May, but buyers face sharply rising prices

Posted June 24, 2017

Sales of USA existing homes rebounded in May having declined in April, with low inventory levels helping to increase the median sales price to a new high while the median number of days a home is on the market reached a new low according to a press release from the National Association of Realtors.

Total existing-home sales were up by 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April, according to new data from the National Association of Realtors (NAR). Last month saw 3,406 total units of homes sold, compared to 3,095 in May 2016.

High demand from buyers and a low supply of homes on the market helped to push prices higher across many parts of the country in May, according to the National Association of Realtors (NAR). The market remained tight, with the inventory of homes for sale in Chicago about 9 percent less year to year.

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Activity in single family and condo/co-op segments improved, with sales growing 1 percent to 4.98 million in the former and 1.6 percent to 640 thousand in the latter. The median home sales price in the Midwest was $203,900, which is 7.3 percent higher than a year ago.

NAR chief economist Lawrence Yun said the unexpected increase in sales in May came as more buyers overcame the increasingly challenging market conditions prevalent in many areas. Dallas was next: values rose 11.2 percent over the past year to $209,200 in the Big D - even as the number of homes on the market rose by more than 8 percent. Four percent of sales were foreclosures and 1% were short sales. The median is the midpoint; half the homes sold for more, half for less. On the month, volume rose 23 percent (from $3.544 billion).

"The bottom line is that there are fewer homes on the market, and they are selling faster", says Joseph Kirchner, senior economist at realtor.com®.

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The median sales price rose to $252,800, a new peak price. Low inventory levels suggest that a lack of homes to buy has been a key factor hampering sales. The median price in the Northeast was $281,300, which is 4.7 percent above May 2016.

Nowhere is that more evident than in Manatee County, where median prices have risen more than 53 percent since the end of 2012, as the market continues to rebound from the housing meltdown during the Great Recession. The median price in the West was $368,800, up 6.9% from May 2016. At $260,000 in May, that was a 1.1 percent drop from the same time previous year. That's up 7.4 percent since May 2016.

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