Economy: Existing Home Sales During May 2018

The Existing Home Sales report for May 2018 was released by The National Association of Realtors® (NAR) this morning:

Predicted: 5,500,000
Actual: 5,430,000

Change from Previous Month: -0.4%
Change from One Year Previous: -3.0%

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Inventory: 1,850,000 (4.1 months supply)

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The yellow-highlighted, "actual" figure above represents the preliminary, seasonally adjusted annualized sales count of existing homes, co-ops and condominiums for the indicated month. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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Median Price for A Used Home During May: $264,800 (All-Time Record High.)

Change from One Year Previous: +4.9%

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Average Price for A Used Home During May: $303,500 (All-Time Record High Match with The June 2017 Figure.)

Change from One Year Previous: +3.1%

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Click here for historical prices and a chart.

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The monthly Existing Home Sales report is released on or around the 25^TH day of each month.

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From today's report:

"...Existing-home sales fell back for the second straight month in May, as only the Northeast region saw an uptick in activity, according to the National Association of Realtors®.

Total existing-home sales, https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month’s decline, sales are now 3.0 percent below a year ago and have fallen year-over-year for three straight months.

Lawrence Yun, NAR chief economist, says a solid economy and job market should be generating a much stronger sales pace than what has been seen so far this year. 'Closings were down in a majority of the country last month and declined on an annual basis in each major region,' he said. 'Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.'

The median existing-home price for all housing types in May was $264,800, an all-time high and up 4.9 percent from May 2017 ($252,500). May’s price increase marks the 75th straight month of year-over-year gains.

Total housing inventory at the end of May climbed 2.8 percent to 1.85 million existing homes available for sale, but is still 6.1 percent lower than a year ago (1.97 million) and has fallen year-over-year for 36 consecutive months. Unsold inventory is at a 4.1-month supply at the current sales pace (4.2 months a year ago).

Properties typically stayed on the market for 26 days in May, unchanged from April and down from 27 days a year ago. Fifty-eight percent of homes sold in May were on the market for less than a month.

'Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand,' added Yun. 'That is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.'

Realtor.com®’s Market Hotness Index , measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in May were Midland, Texas; Boston-Cambridge-Newton, Mass.; San Francisco-Oakland-Hayward, Calif.; Columbus, Ohio; and Vallejo-Fairfield, Calif.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage increased for the seventh straight month to 4.59 percent in May (highest since 4.64 percent in May 2011) from 4.47 percent in April. The average commitment rate for all of 2017 was 3.99 percent.

“The abrupt hike in mortgage rates this spring, along with price appreciation and competition being the strongest in the entry-level part of the market, is why first-time buyers are not as active as they should be and their participation remains below its historical average,” said Yun.

First-time buyers were 31 percent of sales in May, which is down from 33 percent both last month and a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34 percent.

“Realtors® in many parts of the country say their seller clients are dealing with a seesaw of emotions when deciding to put their home on the market,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “While they’re thrilled that they will immediately find multiple buyers interested in their listing, many fear they’ll have extreme difficulty finding another home to buy. Some have even decided to hold off until inventory conditions start improving, which is actually only exacerbating supply shortages.”

All-cash sales were 21 percent of transactions in May, which is unchanged from April and down from 22 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in May, unchanged from last month and down from 16 percent a year ago.

Distressed sales – foreclosures and short sales – were 3 percent of sales in May (lowest since NAR began tracking in October 2008), down from 4 percent last month and 5 percent a year ago. Two percent of May sales were foreclosures and 1 percent were short sales..."