May home sales should continue their recent upward trajectory. Existing home sales are poised to extend a recent string of consecutive monthly gains, while sales of new homes look set to fall a bit from April’s high-water mark but remain up from a year ago.
May home sales should continue their recent upward trajectory. Existing home sales are poised to extend a recent string of consecutive monthly gains, while sales of new homes look set to fall a bit from April’s high-water mark but remain up from a year ago.
Zillow expects May existing home sales to increase 1.2 percent at a seasonally adjusted annual rate (SAAR) from April, to 5.51 million units in May (figure 1). It would be the third consecutive monthly increase in existing home sales, putting existing home sales 4.2 percent above their May 2015 level and higher than in any month since February 2007.
Tight inventory and high demand continue to impact the market, putting upward pressure on the prices of those homes that are available for sale. We expect the seasonally adjusted median sales price of existing homes to increase to $234,600 in May, up 0.7 percent from April and 6.9 percent from May 2015.
New home sales were exceptionally strong in April, surging 16.6 percent from March to 619,000 units (SAAR) – the largest month-over-month increase in new home sales since January 1992. In some respects, this increase was not surprising: The number of single-family permits, starts and homes under construction all showed strong gains in early 2016. As these homes come onto the market, sales should pick up.
Although we expect new home sales to retreat in May from their April highs, falling 7.7 percent on a monthly basis to 571,600 units (SAAR), sales at that level would still be 12.7 percent above May 2015 levels (figure 2). The median seasonally-adjusted price of new homes sold in April also surged, rising 9 percent to an all-time high of $321,700. Similar to sales trends, we expect the median price of new homes sold in May to retreat 2.8 percent from April, but still be up 8.9 percent on an annual basis.
