Home sales rose in May but buyers face sharply rising prices
- Author: Zachary Reyes Jun 21, 2017,
Jun 21, 2017, 21:24
The current sales rate indicates a supply of just 4.2 months, down from 4.7 months in the same month of a year ago. "Current demand levels indicate sales should be stronger, but it's clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions".
Prices also rose for the 63rd straight month, with the median cost for all housing types hitting $252,800, a new peak and up 5.8 percent over May of a year ago.
According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in April 2017 was $246,100, up 6.1 percent from the previous year; the national median existing condo price was $234,600. Sales listings have plummeted 8.4 percent over the past 12 months to 1.96 million.
The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level.
"The inventory data signal even faster price increases ahead, pushing implied real mortgage rates further below zero and, hence, attracting new potential buyers into the market", he wrote in a research note. This was better than forecast (economists thought the rate would decline), but up only 1.1% from the April rate, which was revised slightly lower.
"Those able to close on a home last month are probably feeling both happy and relieved".
Regionally, the South leads the nation in existing home sales, up 2.2% on the month and 4.5% on the year to a 2.340 million rate. Properties typically remained unsold for just 27 days in May, down from 29 days in April and 32 days a year ago. This is also the shortest timeframe since NAR began tracking in May 2011.
Americans shopping for a house are facing an intensifying set of pressures: Fewer and fewer homes are being listed for sale, while prices are climbing at a pace that most incomes can't possibly match. Short sales were on the market for 94 days, foreclosures sold in 48 days and non-distressed homes sold in 27 days.
The fastest-moving markets with rising prices and limited supplies include San Francisco and San Jose, California, Seattle and parts of Utah, Yun said.