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Monday, June 23, 2014
Existing Home Sales and Prices Jump
The National Association of Realtors reported today that May sales of homes that have been previously occupied (the largest segment of homes) jumped 4.9% from April. Existing Home Sales came in at an annualized rate of 4.89 million units which handily beat the market expectations of 4.73 million units.
The median price rose to $213,400 which is a 5.1% increase over the past year (May 2013 to May 2014).
The reason for the spike in sales? Is it interest rates? Nope, its inventory. Home Sales had been suppressed even while fixed mortgage rates hit their lowest levels for 2014 due to a very tight supply of homes available for sale. Since home prices have been increasing at a moderate pace, many homes that were "under water" are now back into positive equity and these homeowners are now finally able to put their homes on the market.