The rate of existing-home sales dropped 1.2 percent in May compared to April and fell 6.6 percent compared to May 2005, the National Association of Realtors reported today.
The median sales price of existing homes, meanwhile, increased 6 percent from May 2005 to May 2006 while the average sale price rose 3.8 percent in that time.
Total existing-home sales — including single-family, townhomes, condominiums and co-ops — slowed since April to a seasonally adjusted annual rate of 6.67 million units in May.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity, the association noted.
David Lereah, NAR’s chief economist, said in a statement, “There’s now a clear pattern of slower home-sales activity in many higher-cost markets, which are more sensitive to rises in interest rates, and higher home sales in moderately priced areas, which have experienced job growth. Although mortgage interest rates remain historically low, the uptrend in interest rates this year is affecting those buyers who are at the margins of affordability.”
Freddie Mac reported that the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.6 percent in May, up from 6.51 percent in April. The rate was 5.72 percent in May 2005.
The national median existing-home price for all housing types was $230,000 in May, up 6 percent from $217,000 in May 2005. The median is a typical market price where half of the homes sold for more and half sold for less.
“Overall price appreciation has returned to normal levels as the supply of homes on the market has risen to a balanced range,” Lereah stated.
Total housing inventory levels rose 5.5 percent at the end of May to 3.6 million existing homes available for sale, which represents a 6.5-month supply at the current sales pace. A supply of more than six months is generally indicative of a buyer’s market.
Existing condominium and cooperative housing sales increased 1.9 percent to a seasonally adjusted annual rate of 852,000 units in May from a pace of 836,000 in April, but were 6.6 percent below the 912,000-unit pace in May 2005. The median existing condo price was $229,300 in May, up 1.9 percent from a year earlier.
Single-family home sales slipped 1.5 percent to a seasonally adjusted annual rate of 5.82 million in May from 5.91 million in April, and were 6.6 percent below the 6.23 million-unit level in May 2005. The median existing single-family home price was $229,700 in May, up 6.4 percent from a year ago.
Regionally, existing-home sales in the West rose 0.7 percent to an annual pace of 1.41 million in May, but were 13.5 percent lower than May 2005. The median price in the West was $345,000, up 4.5 percent from a year ago, the Realtor group reported.
Existing-home sales in the South increased 0.4 percent to a pace of 2.62 million in May, and were 3.7 percent below May 2005. The median existing-home price in the South was $190,000, up 5.6 percent from a year earlier.
In the Midwest, existing-home sales declined 3.8 percent in May to a level of 1.51 million, and were 5.6 percent lower than a year ago. The median price in the Midwest was $174,000, up 1.2 percent from May 2005.
Existing-home sales in the Northeast dropped 4.2 percent to an annual sales rate of 1.13 million units in May, and were 5 percent below a year ago. The median price in the Northeast was $287,000, up 7.1 percent from May 2005.
The association noted that the only valid comparisons for median prices are with the same period a year earlier because of the seasonality in buying patterns. “Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns,” the association reported.