Steel Markets

New & Existing Home Sales Both Gain In May

Written by Sandy Williams

New home sales were at a seven year high in May, climbing 2.2 percent from April to an a seasonally adjusted annual rate of 546,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. Sales outpaced the Bloomberg forecast of 523,000 and were 19.5 percent above the May 2014 estimate. April’s SAAR was adjusted to 534,000 from 517,000.

The median sales price of new houses sold in May dropped by 1 percent to $282,800; the average sales price was $337,000. Approximately 206,000 homes were for sale at the end of May. This represents a supply of 4.5 months at the current sales rate, down from 4.6 months in April.

Regionally sales from April to May dropped 5.7 percent in the Midwest and 4.3 percent in the South, but surged by 87.5 percent in the Northeast and 13.1 percent in the West.

Existing home sales also increased in May as more first-time buyers took advantage of employment gains. Sales rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million. April sale were revised upward to 5.09 million. May sales were 9.2 percent higher than a year ago and rose for the eighth consecutive month. Median sales price for all housing types in May was $228,700, as 7.9 percent gain from May 2014.

“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” said Lawrence Yun, NAR chief economist. “However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”

Single family home sales increased 5.6 percent from April and 9.7 percent from a year ago, to a seasonally adjusted annual rate of 4.73 million. The median price was up 8.6 percent y/y to $230,000.

Condo and co-op sales increased 1.6 percent to a rate of 620,000 units. The year over year increase was 5.1 percent. Median prices increased 1.9 percent y/y to $216,400.

Existing home inventory increased 3.2 percent to 2.29 million homes for sale, up 1.8 percent from May 2014 and represents a 5.1 month supply at the current sales pace.

Yun says first time buyers have returned to the market due to “strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs.”

Existing home sales and median price increased in all four U.S. regions in May:

 – Northeast +11.3 percent to an annual rate of 690,000,+11.3 percent y/y; median price up +4.8 percent y/y to $269,000.
 – Midwest, +4.1 percent to an annual rate of 1.27 million,+12.4 percent y/y; median price +9.4 percent to $181,900
 – South +4.3 percent to an annual rate of 2.18 million, +6.9 percent y/y; median price +8.2 percent to $198,300
 – West +4.3 percent to an annual rate of 1.21 million, +9.0 percent y/y; median price +10.2 percent to $324,000

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