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Home Re-Sales Set New Record in May

The rate of this May’s existing home sales activity was 15.8% ahead of the same month a year earlier.

David Lereah, the Realtors® chief economist, attributed the strong showing to fence straddlers deciding to make their move to buy before mortgage rates increase any further.

While noting that “fundamentals are still very favorable for a vibrant market,” Lereah said that home sales probably will not peak again for a while. Despite an expected slowdown in sales during the second half of the year, “they will remain at strong levels and 2004 is on track to be a record,” he said.

The median existing-home price was $183,600 in May, a 10.3% increase from a year earlier.

“The growth in home prices hasn’t slowed yet, but in the second half of the year we’re expecting an ease in sales to take some of the pressure off of appreciation rates resulting from lean inventories of homes available for sale,” said Walt McDonald, the association’s president.

“This will be a healthy change for the housing market because slower appreciation will help to preserve favorable housing affordability conditions in the future.”

The inventory of unsold homes rose 0.8% in May, reaching a 4.2-month supply at the current sales pace.

May sales were up 5.5% in the West and 3.8% in the South; they declined 0.7% in the Midwest and 1.4% in the Northeast.

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