June 19, 2018Mortgage rates are on the rise. Could that derail sales? According to First American’s Potential Home Sales model, even if the 30-year fixed-rate mortgage rose to 5 percent, the
Existing Home Sales Rebound Pushing Median Price To New High
Existing home sales rebounded in May following a weak April with a seasonally-adjusted annual rate of 5.62 million.
The increase reported by the National Association of Realtors was 1.1% above April 2017 and 2.7% higher than May 2017, the third highest annual pace of the past year.
Despite low inventory and high prices, economic factors gave the spring buying season a boost as homebuyer confidence jumped.
"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," noted NAR chief economist Lawrence Yun.
The competitive market pushed the nationwide median existing home price to a new record high of $252,800. That’s 5.8% above May 2016 and beats the previous median peak of $247,600 last June.
"Home prices keep chugging along at a pace that is not sustainable in the long run," added Yun. "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."
There was an increase in inventory in May, up 2.1% month-over-month to 1.96 million existing homes, but this was more than 8% below a year ago and represents 4.2 months of supply.
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