Why all the downers around existing home sales? Existing Home Sales, unadjusted, year over year, were up 13.6% in May nationally and up 16.7% in the Northeast.
Sales of previously owned U.S. homes declined in May, showing an uneven recovery in residential real estate.
Purchases of existing properties dropped 1.5 percent to a 4.55 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 4.57 million pace.
Estimates in the Bloomberg survey of 74 economists ranged from 4.40 million to 4.73 million.
Existing-home sales, which are tabulated when a contract closes, have climbed since reaching a low of 3.39 million at an annual rate in July 2010. In the buildup to the subprime lending collapse and recession, purchases reached a peak of 7.25 million in September 2005.
The median price of an existing home climbed 7.9 percent to $182,600 in May, the highest since June 2010, from $169,300 in May 2011, today’s report showed. The increase in May reflected more sales of higher-priced properties, according to Lawrence Yun, chief economist of the Realtors group.
The number of previously owned homes on the market decreased 0.4 percent to 2.49 million in May from a month earlier. At the current pace, it would take 6.6 months to sell existing inventory, compared with 6.5 months at the end of the prior period.
Sales of single-family homes decreased 1 percent to an annual rate of 4.05 million, while condominiums and co-op transactions fell 5.7 percent to a 500,000 pace.
Three of four regions showed sales declines, led by a 4.8 percent drop in Northeast. Purchases also fell in the West and South.
Of all purchases, cash transactions accounted for about 28 percent, down from 29 percent in April. Distressed sales, comprised of foreclosures and short sales in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 25 percent of the total last month, the lowest since the group began tracking the data in 2008, down from 28 percent in April.
Investors accounted for 17 percent of purchases in May, a decrease from 20 percent in April. First-time buyers accounted for 34 percent of the market in May.
“First-time buyers are really not stepping up,” Yun said. Typically, first-time buyers make up 40 percent to 45 percent of the purchases, he said. Instead, most sales were homeowners who were trading up, he said.