Existing-home sales were essentially flat in May, while the growth in home prices moderated, according to the National Association of Realtors®. Sales gains in the Northeast and Midwest were offset by declines in the West and South.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 0.2 percent to a seasonally adjusted annual rate of 4.59 million in May from 4.60 million in April, and are 7.5 percent below the 4.96 million-unit pace in May 2013. Last month's sales volume remained the slowest since July 2012, when it was 4.59 million.
Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. "There really should be stronger levels of home sales given our population growth," he said. "In contrast, price growth is rising faster than historical norms because of inventory shortages."
Yun expects some improvement in the months ahead. "With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly."
The median existing-home price for all housing types in May was $198,500, up 7.9 percent from May 2013. Distressed homes - foreclosures and short sales - accounted for 14 percent of May sales, down from 16 percent in April and 21 percent in May 2013. "With rising home equity, we expect distressed homes to decline to a single-digit market share later this year," Yun said.
Ten percent of May sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in May, while short sales were discounted 12 percent.
Total housing inventory at the end of May rose 4.7 percent to 1.99 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in April. Unsold inventory is 3.1 percent above a year ago, when there was a 4.7-month supply.
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