After reporting a notable decrease in U.S. existing home sales in the previous month, the National Association of Realtors released a report on Wednesday showing an unexpected rebound in existing home sales in the month of May.
NAR said existing home sales climbed by 1.1 percent to an annual rate of 5.62 million in May after tumbling by 2.5 percent to a downwardly revised 5.56 million in April.
The rebound surprised economists, who had expected existing home sales to edge down to an annual rate of 5.55 million in May from the 5.57 million originally reported for the previous month.
NAR chief economist Lawrence Yun said the unexpected increase in sales in May came as more buyers overcame the increasingly challenging market conditions prevalent in many areas.
"The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level," Yun said.
The report said low inventory levels helped push the median existing home price to a new high of $252,800 in May, up 3.2 percent from $245,000 in April and up 5.8 percent from $238,900 a year ago.
Yun said, "Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher."
NAR said there were 1.96 million existing homes available for sale at the end of May, up 2.1 percent from the end of April but still 8.4 percent lower than a year ago.
"Current demand levels indicate sales should be stronger, but it's clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions," Yun said.
The report said existing home sales in the Northeast spiked by 6.8 percent, while sales in the West and South jumped by 3.4 percent and 2.2 percent, respectively. Meanwhile, existing home sales in the Midwest slumped by 5.9 percent.
Single family home sales rose by 1.0 percent to an annual rate of 4.98 million, and existing condominium and co-op sales climbed by 1.6 percent to a rate of 640,000.
On Friday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.
New home sales are expected to jump to an annual rate of 600,000 in May after tumbling to a rate of 569,000 in April.
by RTT Staff Writer
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