According to the National Association of Realtors (NAR), each of the four major U.S. regions saw a growth in existing-home sales in May, with the Northeast experiencing the biggest surge.
Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—jumped 2.5 percent from April to an annual rate of 5.34 million in May.
Lawrence Yun, NAR’s chief economist, says the 2.5 percent jump shows that consumers are eager to take advantage of the favorable conditions. “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”
The median existing-home price for all housing types in May was $277,700, up 4.8 percent from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.
Although inventory is up, the supply numbers remain near historic lows, which has a direct effect on price, according to Yun. “Solid demand along with inadequate inventory of affordable homes have pushed the median home price to a new record high,” he says.
Properties remained on the market for an average of 26 days in May, up from 24 days in April and equal to the 26 days in May of 2018. Fifty-three percent of homes sold in May were on the market for less than a month.
Given that housing and properties have been selling so quickly, Yun continues his call for new construction. “More new homes need to be built,” he notes. “Otherwise, we risk worsening the housing shortage, and an increasingly number of middle-class families will be unable to achieve homeownership.”
Realtor.com’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in May were Rochester, New York; Fort Wayne, Indiana; Lafayette-West Lafayette, Indiana; Boston-Cambridge-Newton, Massachusetts; and Midland, Texas.
“The month of May ushered in the home sales upswing that we had been expecting,” says NAR President John Smaby, a second-generation realtor from Edina, Minnesota, and a broker at Edina Realty. “Sales are strengthening in all regions while we see price appreciation for recent buyers.”
First-time buyers were responsible for 32 percent of sales in May, unchanged from the 32 percent the month prior and up from the 31 percent recorded in May 2018. NAR’s 2018 Profile of Home Buyers and Sellers—released in late 2018—revealed that the annual share of first-time buyers was 33 percent.