Housing fits and starts

Existing Home Sales in May totaled 4.55mm annualized, slightly below expectations of 4.57mm and down from 4.62mm in April. The sales drop from April was seen for both single family homes and condos/co-ops. While the amount of homes for sale declined, it wasn’t enough to offset the drop in sales m/o/m and thus months supply rose to 6.6 from 6.5, the most since Nov ’11. The median home price did rise 7.9% y/o/y to $182,600, the most since June ’10 as large y/o/y increases were seen in homes valued $250k+. The NAR interestingly in its release is talking about housing shortages in some markets in the lower price ranges except in the Northeast and “in the West supply is extremely tight in all price ranges except for the upper end.” They also said Florida is seeing “widespread inventory shortages.” Distressed sales totaled 25% of sales vs 28% in April and down from 31% in May ’11. First time buyers made up 34% of sales vs 35% in April. Investors (including those buying homes to rent) accounted for 17% of sales vs 20% in April and 19% in May ’11. Bottom line, housing continues to show signs of bottoming but the recovery will still be in fits and starts for years to come.

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