According to the National Association of Realtors, sales of existing homes fell slightly in May, to 4.55 million at an annual rate, down from 4.62 million in April. Both single-family and condominium sales fell over the month. Sales rose in the Midwest, but fell in the other three regions. Sales of single-family homes were up more than 10 percent from one year earlier, with condo sales up 4 percent. The inventory of new homes on the market rose to 6.6 months at the current sales pace in May, up slightly from 6.25 months from April. Still, inventories are much tighter than they were a few years ago, when they peaked at 12.1 months in July 2010.
The NAR reported that the median sale price in May for an existing home was $182,600 (not seasonally-adjusted), up 7.9 percent from one year earlier; this was the third consecutive month of year-over-year price gains. Prices are up on a year-ago basis for both single-family homes (7.7 percent) and condos (8.8 percent). One factor that supported house price gains in May was that the share of sales from foreclosures and short sales fell 25 percent in May, down from 31 percent one
House prices are also rising according to the Federal Housing Finance Agency’s purchase-only price index, which was up 0.8 percent in April from March, and up 3.0 percent from one year earlier. The FHFA reported that prices were higher in most regions in April, with the biggest gains in the West; prices fell in New England and parts of the Southeast and Midwest.
Most house price measures are increasing as demand has picked up, inventories have declined and downward pressure on prices from foreclosures has lessened. However, the number of foreclosures is expected to increase in the near term as a result of the settlement between the mortgage servicers, the states and the Obama administration, so prices will fall slightly in the near term before stabilizing at the end of this year. Still, it is apparent that a housing market recovery is underway.
To learn more about the construction industry and the current economic environment, please contact the construction professionals of McKonly and Asbury, LLP.