Existing home sales rebounded in May as low inventory levels pushed median home prices to a new high, according to the latest report from the National Association of Realtors.
And as competition increased, the median days a home is on a market sank to a new low, the report showed.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.1% to a seasonally adjusted annual rate of 5.62 million in May. This is down from a downwardly revised 5.56 million in April.
This sales pace is an increase of 2.7% from last year, and the third highest pace over the past year, the report showed.
“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” NAR Chief Economist Lawrence Yun said. “Those able to close on a home last month are probably feeling both happy and relieved.”
“Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher,” Yun said.
The median existing home price for all housing types increased to $252,800 in May, passing up last June’s $247,600 as the new peak median sales price, and increasing 5.8% from May last year. This marks the 63rd straight month of year-over-year gains.
Total housing inventory rose 2.1% at the end of May to 1.96 million existing homes available for sale, but is still 8.4% lower than last year’s 2.14 million. Unsold inventory rests at a 4.2-month supply at the current sales pace, down from 4.7 months last year.
“Home prices keep chugging along at a pace that is not sustainable in the long run,” Yun said. “Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”
Properties stayed on the market an average of 27 days in May, down from 29 days the month before and 32 days last year to the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median 94 days in May, while foreclosures sold in 48 days and non-distressed homes took 27 days.
“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month,” Yun said.