May Existing-Home Sales Slip Less Than 1%; Median Price Hits All-Time High

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The National Association of Realtors (NAR) reported Wednesday morning that the seasonally adjusted annual rate of existing-home sales in May decreased by 0.4% to a seasonally adjusted annual rate of 5.43 million from a downwardly revised rate of 5.45 million in April.

According to the NAR, the national median existing-home price for all housing types in May was $264,800, an all-time high. The median price rose 4.9% compared with May 2017, the 75th consecutive month of rising home prices. In April the national median price was $257,900.

The May decrease followed a 2.5% decline in April sales and leaves existing-home sales down 3% year to date compared with 2017. The consensus estimate called for sales to reach 5.55 million, according to a survey of economists polled by Bloomberg.

In 2017, existing-home sales rose 1.1% year over year, the best level in 11 years. The seasonally adjusted annual rate came in at 5.51 million, the highest since posting 6.48 million in 2006.

The NAR’s chief economist, Lawrence Yun, said:

Closings were down in a majority of the country last month and declined on an annual basis in each major region. Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.

Housing inventory increased by 2.8% in May to 1.85 million homes, equal to a supply of 4.1 months, down from 4.2 months in May 2017, and has fallen year over year for 36 consecutive months. Inventory is down 6.1% from 1.97 million in May 2017.

The percentage of first-time buyers fell by two percentage points month over month to 31%. For all of 2017, first-time buyers accounted for 34% of sales, down one percentage point compared with 2016.

Sales of single-family homes fell 0.6% from the April total of 4.84 million to a seasonally adjusted annual rate of 4.81 million and are down 3% compared with May 2017. Sales of multifamily homes increased by 1.6% in May to a seasonally adjusted annual rate of 620,000 units.

All homes were on the market for an average of 26 days in May, unchanged month over month and down from 27 days in May 2017. Foreclosure (2%) and short (1%) sales accounted for 3% of all May sales, down by one point compared with the prior month and down from 5% in May 2017. The percentage of distressed sales remains at its lowest level since the NAR began tracking it in October 2008.

The NAR also reported the following regional data:

May existing-home sales in the Northeast rose 4.6% to an annual rate of 680,000 but remain down 11.7% compared with May 2017 sales. The median price in the Northeast was $275,900, down 1.8% compared with May of last year.

In the Midwest, existing-home sales fell 2.3% to post an annual rate of 1.26 million in May and are down 2.3% compared with the May 2017 rate. The median price in the Midwest was $209,900, up 4.2% from a year ago.

Existing-home sales in the South dipped 0.4% in May to an annual rate of 2.32 million and are unchanged compared to May 2017 sales. The median price in the South was $233,100, up 4.5% from a year ago.

Existing-home sales in the West dropped 0.8% to an annual rate of 1.17 million in May and are down 4.1% compared with May 2017 totals. The median price in the West was $395,800, up 7.2% compared with the May 2017 median.