Industry NewsMarkets & Economy

Housing inventory shrinks in May

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The inventory of existing homes fell 3.5 percent from April to May, with the 3.8 million homes on the market representing 9.6 months of supply, down from 10.1 months in April, the National Association of Realtors said. Economists generally consider a six-month supply of homes a healthier balance between supply and demand.Sales of existing homes were up 2.4 percent in May, to a seasonally adjusted rate of 4.77 million units, which helped nudge inventory in the right direction, though they were 3.6 percent below the May 2008 rate. It was the first time sales have increased for two consecutive months since September 2005. The increase was lower than expected, however, because some contracts are falling through because appraisals prevent buyers from obtaining loans, NAR said.Distressed properties accounted for 33 percent of sales, down from 45 percent in April and just over half in March, but continue to "downwardly distort" the median home price, NAR said. At $173,000, the natio...