May Existing Home Sales: Chipping Away

• Existing home sales rose 2.5% from April to a seasonally adjusted annual rate (SAAR) of 5.34 million in May. They’re down 1.1% from a year ago.
• The median home price in May was $277,700, up 4.8% from a year ago. May was the 87th straight month of year-over-year gains.
• Inventory at the end of May increased to 1.92 million homes, up 4.9% from April and a 2.7% increase from a year ago.

Existing home sales continue to chip away at the year-over-year deficit caused by last year's declines, with sales growth in both single- and multi-family homes. The market no longer faces the climbing mortgage rates or poor stock market performance that helped set the stage for last year's declines – and existing home sales are bouncing back slowly. We should start to see positive year-over-year growth in the second half of the year.

Even in the face of 4% home-price growth, consumer confidence is strong and mortgage applications for home purchases continue to climb, although not at a pace you'd expect to accompany falling mortgage rates. Low rates can only do so much to offset still-rising home prices and a shortage of homes at the lower end of the market.

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