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June 20th, 2013

Existing-home sales and prices rise in May



Fran Images--SoldBoth existing sales and home prices remained elevated last month while inventories continued to shrink, reported the National Association of Realtors on Thursday.

Existing-home sales continued their upward trend in 2013, increasing 4.2 percent in May to 5.18 million annualized units of sale, up 12.9 percent from the same time last year. Despite a small decline in condo sales, single-family sales rose by 5 percent.

Housing inventory, while gaining 3.3 percent by month’s end, was still 10.1 percent below where it was in May 2012.

‘Numbers are overwhelmingly positive’

“The housing numbers are overwhelmingly positive.  However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent,” Lawrence Yun, the NAR’s chief economist, said in a release. “The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth.”

The national median existing-home price for all types of housing– single-family homes, townhomes, condominiums and co-ops—finished the month at $208,000, a 15.4 percent gain from May 2012, the strongest gain since 2005.

Foreclosures and short sales accounted for 18 percent of all existing sales in May, the same as April. However, that 18 percent share matches the lowest level of distressed sales since the NAR began tracking distressed figures in October 2008. The decline in distressed sales—which tend to sell at a significant discount—helped boost May’s price gain.

In May, foreclosures sold at an average discount of 15 percent, while short sales sold at a 12 percent discount.

How long did it take to sell?

In addition to price gains and sales increases, homes are spending less time on the market which is also contributing to the market’s overall improvement. The NAR reported that the median time homes spent on the market was 41 days last month, a five-day improvement from April and a much improved figure from the median time of 72 days in May 2012. Non-distressed homes sold the fastest at 39 days—foreclosures took 43 days to sell while short sales took 79 days. Nearly half of all homes sold last month sold in less than a month.

Who’s buying?

Fewer first-time homebuyers purchased in May than April, just a one percent decline to 28 percent, but that figure is 6 percent below where it stood in 2012.

Cash buyers continue to increase, rising to 33 percent in May, up from 28 percent in May 2012.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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