After a lackluster first quarter, existing-home sales climbed 4.9% in May, a rebound attributed to slower price growth due to rising inventory levels and a temporary but slight decline in forward mortgage rates. All four regions of the country experienced sales gains compared to a month earlier.
The National Association of Realtors reports that this increase in existing-home sales, which equates to a seasonally adjusted annual rate of 4.89 million, is the highest monthly rise since August 2011, when sales went up 5.5%.
An increase in the number of homes for sale, in addition to a temporary pause in rising interest rates, is showing promise for home buyers, particularly those new to the market.
Total housing inventory increased 2.2% in May to 2.28 million existing homes available for sale, while unsold inventory is 6% higher than a year ago when there were 2.15 million existing homes available for sale.
Additionally, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 4.19% in May from 4.34% in April, and is the lowest since June 2013.
“Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market,” Lawrence Yun, NAR chief economist, said in a written release. “Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run.”
To read the full report, click here.
Written by Emily Study
