US Existing Home Sales Reach Four Year High

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The total number of existing home sales in the U.S. reached a seasonally adjusted annual rate of 5.18 million in May, the highest level since November 2009, according to new data from the National Association of Realtors. 

The number of existing home sales, which includes single-family homes, townhouses, condominiums and co-ops, increased 12.9 percent from the 4.59 million pace last year, and was 4.2 percent higher than the previous month. Government tax incentives were in place in 2009, NAR notes.

The national median existing home price was $208,000 in May, a 15.4 percent increase from last year.  

The sales numbers are mostly positive, staying above year-ago levels for 23 months, NAR reports. But NAR argues the inventory of homes for sales is still low. An additional 50 percent of supply in the market is needed, NAR says.

"The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth," NAR chief economist Lawrence Yun said in the release.  

Total housing inventory was 2.22 million existing homes for sale, representing a 5.1-month supply at the current pace, down from the 5.2-month supply in April. 

Although, the housing market continues to steadily recover, the market conditions are different from the housing boom, which was known for easy credit and overbuilding, NAR president Gary Thomas said. 

"The issue now is pent-up demand and strong growth in the number of households, with buyer traffic 29 percent above a year ago, coinciding with several years of inadequate housing construction...contributing to sustainable price growth," Mr. Thomas said.

The median time for homes on the market was 41 days in March, 43 percent less than the 72 days on the market last year, NAR reports.