Existing home sales in May 2015 posted a solid 9.2 percent increase on a seasonally adjusted annualized rate (SAAR) compared to a year ago and rose 5.1 percent from April 2015 as first-time home buyers increased, reported the National Association of Realtors® (NAR). Median price ramped up 7.9 percent from a year ago to $228,700, less than 1 percent away from the all-time high price of $230,200 recorded in July 2006. Some of the increase was driven by the return of first-time homebuyers, which increased from 30 percent in April to 32 percent in May.
The following graph shows the non-seasonally adjusted monthly existing home sales comparing 2015 to the same month a year ago, now up every month but January. Sales tallied 497,000 in May 2015 versus 473,000 a year ago – an increase of 5.1 percent. May sales were up 10.7 percent sequentially from April (not seasonally adjusted).
Home values continued on a strong track with 2015 median prices up an average 7.2 percent monthly year-to-date. Month-to-month comparison are shown in the following graph.
Other details from the May 2015 NAR home sales release include:
- Sales have risen eight consecutive months on a year-over-year basis
- Median prices have increased 39 consecutive months on a year-over-year basis
- At 32 percent of all transactions, first time homebuyers made up the highest level of buyers since September 2012
- All-cash transactions again made up 24 percent of all closings, though down from 32 percent a year ago and remain unchanged for the third consecutive month
- 67 percent of investors paid all-cash in May and made up 14 percent of all May home sales
- Foreclosures and short sales made up 10 percent of the market versus 11 percent a year ago
- 7 percent of May home sales were foreclosures and 3 percent short sales
- Foreclosures sold at an average discount of 15 percent versus non-distressed properties and short sales 16 percent
- 45 percent of the properties sold in May were on the market less than 30 days
- The typical property was on the market 40 days in May, with non-distressed properties at 38 days, foreclosures 56 days and short sales 131 days
Since prices are a function of the interaction of supply and demand, expectations for rising prices persist given the current 4.9 months (on a seasonally adjusted basis), down from the normal 6 months. Months inventory is shown in the following graph since 2009.
To read the entire May 2015 NAR existing home sales release click http://www.realtor.org/news-releases/2015/06/existing-home-sales-bounce-back-strongly-in-may-as-first-time-buyers-return
Now that median home prices are at within 1 percent of the all-time record, the housing recovery is all-but complete. Sales are now reflecting ongoing strong job gains.
While I do expect persistent strong home sales, as interest rates continue to rise in coming months expect the rate of price appreciation to mute somewhat.
Other good news is the CFPB pushing back the implementation of the TRID rules away from the high-season closings of August, now commencing October 3, 2015.
If you are waiting for the housing recovery, it already happened.
Ted