U.S. Home Resales Surpass 5 Million in May - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

U.S. Home Resales Surpass 5 Million in May

Posted: Updated:
(Photo: MGN) (Photo: MGN)

WASHINGTON (AP)- U.S. sales of previously occupied homes surpassed the 5 million mark in May, the first time that's happened in 3 ½ years. The gain shows the housing recovery is strengthening.
 
The National Association of Realtors said Thursday that home re-sales rose 4.2 percent in May to a seasonally adjusted annual rate of 5.18 million. That's up from April's pace of 4.97 million.
 
Sales last exceeded 5 million in November 2009. During that month and October 2009, a home-buying tax credit briefly inflated the sales pace. Prior to that, sales hadn't been above 5 million since July 2007.
 
While the sales pace is still below the 5.5 million that is consistent with healthy markets, it has risen nearly 13 percent in the past 12 months.
 
And with a tight supply of homes on the market, the median sales price rose to $208,000 - the highest since July 2008.
 
"Housing is now the strongest part of the economy in growth terms," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.
 
The housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some of the drag from higher taxes and federal spending cuts.
 
Steady hiring and low mortgage rates have encouraged more people to buy homes. And with demand up, prices rising and few homes on the market, builders have grown more optimistic about their prospects, leading to more construction and jobs.
 
Sales of previously occupied homes rose last month in every region of the country. They increased 8 percent in the Midwest, 4 percent in the South, 2.5 percent in the West and 1.6 percent in the Northeast.
 
The supply of homes for sales also grew, a sign that more homeowners are confident that they can lure buyers. The number of homes on the market rose 3.3 percent in May to 2.22 million. Still, inventories are 10 percent below year-ago levels.
 
Still, the report showed that a critical part of the market remains weak. First-time buyers represented only 28 percent of buyers in May. That's down from 34 percent a year ago and significantly below more normal levels above 40 percent. The decline in first-time buyers suggests many younger Americas are unable to get financing.
 
Banks have raised lending standards since the housing crisis, requiring higher credit scores, larger down payments and more detailed employment records.
 
Distressed sales, which include foreclosures and short sales, accounted for 18 percent of May sales, unchanged from April. Both months matched the lowest share of distressed sales since the Realtors began tracking this data in October 2008. Distressed sales stood at 25 percent of sales in May 2012.
 
On Wednesday, Federal Reserve Chairman Ben Bernanke cited the housing gains as a major reason the Fed's economic outlook has brightened.
 
Still, mortgage rates have jumped in recent weeks. And they are expected to rise further now that the Fed has signaled it plans to scale back its bond purchases this year if the economy continues to strengthen. Higher mortgage rates could slow some of the housing market's momentum.
 
A better outlook for housing has made builders more optimistic. The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 52, up from 44 in May. It was the highest reading in more than seven years and the largest monthly increase in more than a decade. A reading above 50 indicates more builders view sales conditions as good rather than poor.

  • Delmarvawide NewsDelmarvawide NewsMore>>

  • Appointed DelTech President Rejects Offer

    Appointed DelTech President Rejects Offer

    Friday, July 25 2014 1:19 AM EDT2014-07-25 05:19:49 GMT
    Wor-Wic Community College President Dr. Ray Hoy announced Thursday he will not become the fifth president of Delaware Technical Community College, despite DelTech's public announcement of the appointment weeks ago.More
    Wor-Wic Community College President Dr. Ray Hoy announced Thursday he will not become the fifth president of Delaware Technical Community College, despite DelTech's public announcement of the appointment weeks ago.More
  • Tornado Leaves 2 Dead, 36 Hurt at Va. Campground

    Tornado Leaves 2 Dead, 36 Hurt at Va. Campground

    Thursday, July 24 2014 11:40 PM EDT2014-07-25 03:40:58 GMT
    A confirmed tornado accompanied by softball-sized hail and rain toppled dozens of trees and flipped recreational vehicles at a campground Thursday, killing two people and injuring 36, officials said.More
    The sky turned black and cellphones pinged with emergency messages. Moments later, a tornado tore through Cherrystone Family Camping & RV Resort on Virginia's Eastern Shore on Thursday, snapping dozens of trees and flipping over RVs. A husband and wife were killed. Thirty-six other people were injured.More
  • Del. Court Upholds Death Sentence in Rape-Murder

    Del. Court Upholds Death Sentence in Rape-Murder

    Friday, July 25 2014 1:43 AM EDT2014-07-25 05:43:26 GMT
    Delaware's highest court has upheld the conviction and death sentence for a man found guilty of raping and killing a University of Delaware student.More
    Delaware's highest court has upheld the conviction and death sentence for a man found guilty of raping and killing a University of Delaware student.More
Powered by WorldNow

All content © Copyright 2000 - 2014 Worldnow and WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service