Existing home sales improved in May but the supply of homes for sale remains tight — which isn’t good news for buyers, the National Association of Realtors said Thursday.
Total existing home sales increased 4.2% to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April, NAR said. That’s the highest rate since November 2009 and almost 13% above year-ago levels.
The inventory of homes for sale, meanwhile, dipped to a 5.1 month supply, down from 5.2 months in April. That means all the homes would sell in that time frame if no new supply was added and sales continued at May’s pace. Realtors consider a 6-month supply to be a balanced market between buyers and sellers.
Total housing inventory at the end of May was up 3.3% to 2.22 million existing homes for sale.
Despite last month’s “nice” gain in homes for sale, the supply is unlikely to grow unless home building ramps up by an additional 50%, says Lawrence Yun, NAR chief economist.
Homes are also selling fast. The median time on market for all homes was 41 days in May, down from 46 in April.
Nationwide, 45% of all homes sold in May were on the market for less than a month, NAR says.
Single-family home sales rose 5% in May to a seasonally adjusted annual rate of 4.6 million and are almost 13% above the year ago pace.