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First Cut: Sales of existing homes highest in 9 months, solid for single family and multi-unit

Sales of existing homes were up 2.5% in May at 5.34 million units (SAAR) and were at the highest level since 5.35 million units in August 2018. Sales were off 1.1% from 5.40 million units in May 2018. The report was above median expectations in a market survey. Sales were up 2.6% for single-family units at 4.75 million and up 1.7% for multi-units at 590,000. Sales were also up for all four regions in May from April. The Northeast was up 4.7%, the Midwest up 3.4%, and both the South and West had gains of 1.8%.

Overall, activity for home resales — which accounts for about 4/5 of the market — have responded to lower mortgage rates in recent months and regained the momentum lost in the second half of 2018. Regional sales seem to be less affected by weather and more by fundamental demand for homebuying.

The supply of homes available for sale nudged up to 4.3 months’ in May, still a narrow inventory for potential buyers, but it appears that sellers are more willing to list properties with a revival in the market.

The median price for an existing home rose 4.0% to $277,700 in May from $266,900 in April and was up 4.8% compared to last year. Upward momentum for prices is still on track.

 

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