Existing-home sales posted strong gains in May as increasing inventory continued to temper price growth and the market showed signs of bouncing back from a lackluster first quarter, the National Association of Realtors reported today.

Existing-home sales were up 4.9 percent from April to May, to a seasonally adjusted rate of 4.89 million, but were still down 5 percent compared to a year before, the trade group said.

“Homebuyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” said NAR Chief Economist Lawrence Yun in a statement. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.”

Total housing inventory in May continued to trend upwards, but the amount of time it would take for home supply to sell out decreased thanks to a faster pace of sales.

The supply of homes was up 2.2 percent from April to May, to 2.28 million existing homes for sale, a 6 percent increase from a year ago. That represents 5.6 months of supply at the current pace of sales, down from 5.7 months in April. Many analysts consider a six-month supply of homes to represent an even balance of buyer and seller demand, with less supply indicating a shortage of homes.

“Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market,” Yun noted. “Therefore, new-home construction is still needed to keep prices and housing supply healthy in the long run.”

The median price of an existing home was up 5.1 percent year over year in May to $213,400.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription