Existing-home sales increased 2.0% to a seasonally adjusted annual rate of 4.99 million in May from the pace in April but remain 15.9% below May 2007, the National Association of Realtors reported Thursday.
Meantime, prices continued diving, with the median existing home price down 6.3% from a year ago to $208,600. Inventory declined marginally by 1.4% to4.49 million, a 10.8-month supply.
Single-family home sales rose 1.6% to a seasonally adjusted annual rate of4.41 million, 14.5% below May 2007. The median existing single-family home price was $206,700 in May, a drop of 6.8% year-over-year.
Regionally, sales in the Midwest rose 5.5% to a pace of 1.16 million, 16.5% percent lower than a year ago, with the median price down 0.7% to $165,300.Sales rose 4.6% in the Northeast to an annual rate of 910,000, 15.0% below May 2007, with the median price down 2.4% from a year ago. Sales in the West increased 2.0% to1.02 million in May, 12.8% off last year's pace, with the median price down 16% to $286,600. Sales fell 0.5% in the South to an annual rate of 1.91 million, 17.0% below last year, and the median price fell 4.3% to $175,000.
"Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets," said Lawrence Yun, NAR chief economist. "Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices."
Still, Yun pointed out that unpublished snapshot data shows a number of areas are experiencing higher sales activity, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich. "Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing," Yun said."It¹d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming."