Sales for existing homes, in the United States, increased by 1.1 percent in May; a surprising mark after such a decline in April. According to the National Association of Realtors, home prices may have improved a little even though housing availability is still constricted.
The NAR says that sales for existing homes—homes that have been owned before or have been on the market for a significant amount of time; essentially not “brand new” homes—registered at a seasonally adjusted annual rate of 5.62 million last month, which is up about 1 percent from the prior month and 2.7 percent on the year.
According to NAR chief economist Lawrence Yun, “Those able to close a home last month are probably feeling both happy and relieved. Listing in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”
Looking at his report, 55 percent of homes sold in the month of May had only been on the market less than a month. The report also says that properties tended to stay on the market only about 27 days, last month. This is down from 29 days in April and 32 days from one year ago. The 27-day marker is also a new record since the NAR started tracking this metric in 2011.
Yun goes on to say, “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.”
Numbers show, too, that housing inventory was actually up more than 2 percent at the end of last month: 1.96 million existing homes are still for sale. However, that is down 8.4 over last year.
Svenja Gudell is the chief economist at the online real estate hub Zillow. He says, “It’s no exaggeration to say that current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal. There’s a number of reasons inventory is so low, including relatively limited new construction (especially at lower price points), pockets of high negative equity that prevent sellers from listing and a shift in the housing stock toward single-family home rentals that keeps those homes from trading hands as frequently as they might.”