Home sales rose 10.3% in May from April and 5.1% from May 2015, according to the June RE/MAX National Housing report, released Friday morning.
The median price of homes sold also rose, up 4.2% year-over-year to $222,475 and up 3.5% from April. Inventory in May was down 14.8% from May 2015, driving the national Months Supply down to 3.0 from 3.2 in April.
"May home sales increased at a rate that's slightly higher than the average monthly increase," said said Dave Liniger, RE/MAX CEO, Chairman and Co-Founder. "This is despite the fact that inventory in many markets remains very low. At the same time, interest rates appear to have stabilized, which helps encourage potential home buyers. Price increases continue to moderate and are rising at a more sustainable rate. This market is offering current homeowners more incentive to sell, which could have a positive impact on overall inventory levels."
"Demand for housing, coupled with a lack of choice for buyers, pushed home values up yet again," said Bob Walters, Quicken Loans Chief Economist. "This is a narrative we have heard for quite some time. Many owners aren't moving on from their current homes, which is holding back available inventory for both first-time and move-up buyers."
In the 52 metro areas surveyed in May, the sequential monthly increase was greater than the 8.5% average seen from April to May over the last seven years. Like previous months this year, home sales continued to be strong in the Northeast. Across the nation in May, 34 of the 52 metro areas surveyed reported home sales higher than one year ago, with 16 experiencing double-digit increases, including Augusta, ME +25.2%, Trenton, NJ +20.2%, Las Vegas, NV +18.5%, Richmond, VA +16.6%, Providence, RI +15.8% and Boston +14.3%.
May was the 52nd consecutive month without a drop in price from the previous year. In 2015, the monthly average of year-over-year price increases was 7.6%. The 4.2% rise in May may mark a moderation in price increases, which would have a positive impact on home affordability. Among the 52 metro areas surveyed in May, only five had a year-over-year drop in prices. Two were unchanged and the remaining 45 metros reported higher prices than last year, with 7 rising by double-digit percentages, including Orlando, FL +13.5%, Portland, OR +13.0%, Fargo, ND +11.9%, Tampa, FL +11.4%, Nashville, TN +10.4% and Denver, CO +10.3%.
The average Days on Market for all homes sold in May was 58, down 6 days from the average of 64 in both April 2016 and May 2015. May became the 38th consecutive month with a Days on Market average of 80 or less. In the three markets with the lowest inventory supply. Seattle, Denver and San Francisco, Days on Market were 29, 23 and 22 respectively. The highest Days on Market averages were seen in Augusta, ME 174, Des Moines, IA 103 and Burlington, VT 92. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
The number of homes for sale in May was just 0.8% lower than in April, but 14.8% lower than in May 2015. The average loss of inventory on a year-over-year basis in 2015 was 12.2%. While inventory remains much lower than last year, there are signs of stabilization month-to-month. The number of metros with a Months Supply of Inventory below 2.0 has jumped significantly. While January and February saw 5 and 6 metros below 2.0 and March and April both reported 11, May saw 10 metros with a supply less than 2 months, including Denver, CO 1.0, Seattle, WA 1.1, San Francisco, CA 1.2, Portland, OR 1.3, Boston, MA 1.5, Omaha, NE 1.5, Dallas-Ft. Worth, TX 1.6 and San Diego, CA 1.6.