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May Existing-Home Sales Hit 5-Month High, NAR Data Show

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May Existing-Home Sales Hit 5-Month High, NAR Data Show

US existing home sales increased to the highest level since December in May, a move that is expected to bode well for the economy, the National Association of Realtors said Tuesday.

Sales rose 3.2% sequentially to a seasonally adjusted annual rate of 4.17 million units last month. The consensus was for a 1.1% increase in a survey compiled by Bloomberg.

"More Americans are on the move, with home sales rising to the highest level since December. This is great news for the housing market and the economy," NAR Chief Economist Lawrence Yun said. "Improving affordability is helping drive this momentum."

Sales grew in the Northeast, Midwest and South, and were unchanged in the West.

"Increased home sales mean more economic activity -- lawn care, furniture purchases, moving services, mortgage originations and other related business activities all get a boost," Yun said.

The average 30-year fixed-rate mortgage increased to 6.44% last month from 6.33% in April, but was down from 6.82% a year earlier, the NAR said Monday, citing Freddie Mac data.

"Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average," Yun said. "Income gains are also outpacing home price growth by a small margin in most parts of the country."

Single-family home sales increased 3.5% month over month in May, while condominium and co-op sales remained unchanged, NAR data showed.

The median sales price of existing homes increased 1.3% year over year to $429,300 in May, marking the 35th straight month of annual gains, according to the NAR report.

"The new record-high May home price reflects solid fundamentals for homeowners and ongoing supply constraints," Yun said. "Only 1% of all home sales involved a foreclosure or an underwater situation in which the sale price could not cover the outstanding mortgage balance. This shows that homeowners are on solid financial footing."

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