Housing shortages propelled the median sales price to a new high in May, the National Association of REALTORS® reported Wednesday. But that did not appear to spook home buyers as demand remained high. The median days on the market dropped to a record low in May as homes sold faster, NAR reports.
Overall, existing-home sales—which include completed transactions for single-family homes, townhomes, condos, and co-ops—rose 1.1 percent month over month in May to a seasonally adjusted annual rate of 5.62 million. Existing-home sales are now 2.7 percent higher than a year ago. Every region of the U.S. except for the Midwest saw an uptick in sales last month.
“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,” says Lawrence Yun, NAR’s chief economist. “Those able to close on a home last month are probably feeling both happy and relieved. 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.”
The median existing-home price for all housing types rose to $252,800 in May. That surpasses last June’s peak of $247,600, NAR reports.
“That is not sustainable in the long run,” Yun says. “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.”
Indeed, housing shortages continue to be a thorn in the side of the industry. Total housing inventory ticked up just 2.1 percent to 1.96 million existing homes available for sale in May. Inventories are 8.4 percent lower than a year ago. Unsold inventory is at a 4.2-month supply at the current sales pace.
Properties sold fast in May. Fifty-five percent of homes sold in May were on the market for less than a new month, a new high, NAR reports.
Nationwide, properties stayed on the market for a median of just 27 days in May, the shortest time frame since NAR began tracking such data in May 2011. Short sales were on the market the longest at a median of 94 days, foreclosures sold in 48 days, and nondistressed homes took 27 days.
“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month,” Yun says. The metro areas where listings stayed on the market the shortest amount of time in May, according to inventory data from realtor.com®, were:
- Seattle-Tacoma-Bellevue, Wash.: 20 days
- San Francisco-Oakland-Hayward, Calif.: 24 days
- San Jose-Sunnyvale-Santa Clara, Calif.: 25 days
- Salt Lake City: 26 days
- Ogden-Clearfield, Utah: 26 days.