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Sales of previously owned homes rebounded more than expected in May, after mortgage rates pulled back slightly in April. <\/p>\n
Existing home sales in May rose 3.2% from April to a seasonally adjusted, annualized rate of 4.17 million units, according to the National Association of Realtors. Economists were expecting less than a 1% gain. Sales were also up 3.2% from a year earlier, the strongest pace since December.<\/p>\n
This count is based on closings, so the contracts were likely signed in April, when mortgage rates came down a bit from the sharp jump at the start of March, due to the war with Iran. <\/p>\n
“Improving affordability is helping drive this momentum,” said Lawrence Yun, chief economist for the Realtors, in a release. “Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average. Income gains are also outpacing home price growth by a small margin in most parts of the country.”<\/p>\n
Inventory in May rose 3.3%, month to month, to 1.55 million units for sale and was up a little less than 1% from a year ago.\u00a0At the current sales pace, that is a 4.5 months’ supply. Six months is considered balanced between buyer and seller. \u00a0<\/p>\n
With a still tight supply, prices continue to rise. The median price of an existing home sold in May was $429,300, an increase of 1.3% from the year before and a record high price for the month.<\/p>\n
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