Existing home sales increased 4.2% in May, and were up 12.9% from the same period a year ago. The National Association of Realtors (NAR) reported that May 2013 total existing home sales were at a seasonally adjusted rate of 5.18 million units combined for single-family homes, townhomes, condominiums and co-ops. That compares to 4.97 million units in April, and 4.59 million units during the same period a year ago. All regions were up from a year ago: 16.3% in the Midwest, 16.1% in the South, 8.3% in the Northeast and 7.0% in the West. All four regions increased from April, ranging from 8.0% in the Midwest to 1.6% in the Northeast. NAR noted that May existing sales reached the highest level since November 2009 when the market was responding to the home buyer tax credit.
The May 2013 level of single-family existing sales increased 5.0% from April to a seasonally adjusted 4.60 million sales, and was up 12.7% from the same month a year ago. Seasonally adjusted condominium and co-op sales decreased in May for the third consecutive month, declining 1.7% to a seasonally adjusted 580,000 units, but were up 13.7% from the same period a year ago.
The total housing inventory at the end of May increased 3.3% from the previous month to 2.22 million existing homes for sale. At the current sales rate, the May 2013 inventory represents a 5.1-month supply compared to a 5.2-month supply in April, and a 6.5-month supply of homes a year ago. NAR also reported that the May median time on market for all homes was 41 days, down from 46 days in April and 72 days during the same month a year ago. NAR reported that 45% of all homes sold in May were on the market less than a month.
Some 18% of May 2013 sales were distressed, defined as foreclosures and short sales sold at deep discounts. This level was unchanged from April, but was down from 25% during the same month a year ago, and was equal to the lowest distressed share since NAR began tracking the series in October 2008.
The median sales price for existing homes of all types in May 2013 was $208,000, up from $191,800 in April, and up 15.4% from $180,300 during the same period a year ago. NAR reported that May represented the fifteenth consecutive monthly year-over-year price increase. May represented the sixth consecutive month of double-digit median price increases, and is the strongest price gain since October 2005. The median condominium/co-op price increased from $189,800 in April to $202,100 in May, and was up 11.8% from $180,700 a year ago.
In May 2013, all cash sales were 33% of transactions compared to 32% in April, and 28% in May 2012. Investors accounted for 18% of May 2013 home sales, down from 19% in April, but up from 17% during the same month a year ago. First-time buyers accounted for 28% of May 2013 sales, down from 29% in April and 30% in March, and down from 34% during the same period a year ago.
All cash investors continue to drive existing home sales and prices, while first-time buyers seek to gain footing. NAR sounded a distress call to builders to increase new residential construction by 50% to address the tight supply of homes and the resulting surge in prices. Yesterday’s meeting of the Federal Open Market Committee suggested continued upward movement in mortgage rates, and might stir potential buyers and sellers to act, having already missed the low point of the mortgage rate cycle.
The increase in May existing home sales was consistent with the 0.3% increase in the April 2013 Pending Home Sales Index.