Existing-Home Sales Underperform in May
Existing-home sales were essentially unchanged in May, according to the National Association of Realtors®, falling 0.3% to a seasonally adjusted annual rate of 5.99 million from an upwardly revised sales pace of 6.01 million in April.
“I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers,” said Lawrence Yun, the association’s senior economist. “Household formation has slowed dramatically since 2006, implying that many people are doubling up — they’re adding roommates or moving in with parents.
“The market is underperforming when you consider positive fundamentals such as the strength in job creation, economic growth, favorable mortgage interest rates and flat home prices. It appears some buyers are simply waiting for more signs of stability before they get serious about getting into the market.”
The national median existing home price for all housing types — including single-family, townhomes, condominiums and coops — was $223,700 in May, 2.1% below the median of $228,500 a year earlier.
The total inventory of existing homes for sale rose 5% at the end of May to 4.43 million, the Realtors® reported, which represents an 8.9-month supply at the current sales pace, up from an 8.4-month supply in April.
Existing-home sales rose 5.8% in the Northeast and 0.7% in the Midwest. They were down 0.8% in the West and 3.4% in the South.