Eye On Housing
Existing home sales increased 1.1% in May, and 55% of homes sold last month were on the market less than a month as buyers overcame low inventory and higher prices. Although May inventory increased 2.1%, it remains 8.4% lower than a year ago and fell year-over-year for the 24th consecutive month. The National Association of Realtors (NAR) reported that at the current sales rate, the May unsold inventory represents a 4.2-month supply, down from a 4.7-month supply a year ago. May existing sales were up 2.7% from the same month a year ago, and reached a seasonally adjusted rate of 5.62 million compared to a downwardly revised 5.56 million in April. Total existing home sales include single-family homes, townhomes, condominiums and co-ops.
May existing sales increased 6.8% in the Northeast, 3.4% in the West and 22% in the South, but declined 5.9% in the Midwest. Year-over-year, the South was up 4.5%, the West by 3.4% and the Northeast by 2.7%, while only the Midwest was down slightly.
Homes stayed on the market for only 27 days in May, compared to 29 days in April, and 32 days a year ago. The May timeframe was the shortest in the history of that series which began in May 2011. The May first-time home buyer share was 33%, down from 34% in April, but up from 30% in May a year ago.
The May all-cash sales share increased to 22% from 21% in April, and was unchanged from a year ago. Â Individual investors purchased a 16% share in May, up from 15% in April, and up from 13% a year ago. Some 64% of investors paid cash in May, up from 57% of investors in April.
The May median sales price jumped 5.8% from last year to $252,800, representing the 63rd consecutive month of year-over-year increases. The May median condominium/co-op price of $238,700 was up 4.8% from the same month a year ago.
April pending sales dipped for the second consecutive month, so the May bump in existing sales was good news. New home sales have grown 11.3% this year, and both jobs and incomes continue to grow, suggesting an improving market for new single-family construction.
This seems as if buyers are realising that the demand is only going to rise and are buying properties before supply is once again lowered. But it is a good sign for the housing market, especially with the increase in new home sales. The better the market gets, the better it gets for all of us.
During this pandemic there are more challenges that are unprecedented before. People must adopt to the new normal to survive.