Key Takeaways from the May Existing Home Sales Report
- Existing home sales increased sharply in May, more than reversing the previous month’s decline, according to the National Association of Realtors. Sales totaled 5.35 million units (SAAR), the highest level in two years and the third highest since April 2007.
- The median price of existing homes sold edged down 0.1 percent month-over-month, after rising sharply through much of the spring.
It’s been a see-saw spring for existing home sales. Sales posted an exceptionally strong March (up 10.9 percent from February), then retreated for a dismal April (down 7.2 percent from March). Sales jumped again in May, according to the National Association of Realtors, up 5.1 percent month-over-month to 5.35 million units at a seasonally adjusted annual rate (SAAR). The strong gain was much larger than expected.
Sales are at their highest level in almost two years, and May marked only the third time since April 2007 that monthly sales have exceeded 5.3 million (figure 1).
Sales in the Northeast led the rebound, increasing 11.3 percent from April. In the other three major regions – the Midwest, South and West – sales were up slightly more than 4 percent month-over-month. The Midwest and Northeast regions are showing the strongest annual rebounds, up 12.4 percent and 11.3 percent, respectively, year-over-year.
Signaling perhaps a slightly stronger hand for buyers, the median sales price edged down 0.1 percent to $220,570. Although the change from April was very small – about $240 – it comes on the heels of strong price gains in February and April. The median sales price in May fell slightly in the West and South, was essentially flat in the Midwest and increased robustly in the Northeast compared to April. Nationwide, the median price of existing homes sold was up 7.9 percent year-over-year in May.
Due in part to May’s strong sales, the month’s supply of homes on the market fell to 4.89 months (seasonally adjusted) – the shortest supply since fall 2013, and near levels observed during the housing boom years of the mid-2000s. As the summer home shopping season kicks into high gear, persistently low inventory will likely continue to help drive up prices.