Existing home sales rise at strongest pace since 2009

Sales of existing homes rose in May to their fastest pace in nearly six years, a sign of a strengthening economy.

{mosads}Sales, which are completed transactions that include single-family homes, increased 5.1 percent to a seasonally adjusted annual rate of 5.35 million, the best showing since November 2009, the National Association of Realtors (NAR) said on Monday. In April, 5.09 million sales were reported.

May marked the third straight month that sales eclipsed 5 million, setting up the housing market for one of the best years since the financial crisis began in 2008.

Overall, sales are 9.2 percent above the 4.9 million posted a year ago.

“Solid sales gains were seen throughout the country in May as more homeowners listed their homes for sale and therefore provided greater choices for buyers,” said Lawrence Yun, the NAR’s chief economist.

“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation,” he said.

Yun said that, without bigger gains in new home construction, prices will probably remain elevated, even with higher mortgage rates above 4 percent.

Inventory in May increased 3.2 percent to 2.29 million homes for sale, and is 1.8 percent higher than a year ago.

Available homes are at a 5.1-month supply at the current sales pace, down slightly from April’s 5.2 months.

The median existing-home price for all housing types in May was $228,700, which is 7.9 percent above May 2014.

Regionally, the Northeast led the way with an 11.3 percent gain, although all regions saw increases.

Sales were up 4.1 percent in the Midwest, and 4.3 percent in both the South and the West.

With job gains remaining strong, the number of first-time buyers rose to 32 percent in May, the highest level since September 2012, a sign Yun called “encouraging.”

“More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise,” he said.

The average 30-year fixed-rate mortgage interest rate climbed in May to 3.84 percent from 3.67 percent in April but remained below 4 percent for the sixth straight month, according to Freddie Mac.

Distressed sales — foreclosures and short sales — remained at 10 percent for the third consecutive month in May, below the 11 percent of a year ago.