Existing home sales in May rose to a seasonally adjusted annual rate of 5.62 million. Economists surveyed by Briefing.com had projected a 5.52 million annual rate. The May total is up from April’s revised total of 5.56 million and is 2.7% above the pace in May 2016.
The median existing-home price for all housing types increased 5.8% to $252,800, which was the 63rd straight month of year-over-year gains and the highest median sales price on record. Total housing inventory increased 2.1% in May to 1.96 million existing homes. That was 8.4% lower than a year ago; the inventory of unsold homes dropped to a 4.2-month supply versus 4.7 months a year ago. With a 6-month supply seen as an indicator of a balanced market, supply/demand conditions remain tight.
All this is reassuring to investors or traders worried that the Federal Reserve’s June 14 interest rate increase would immediately flatten the housing market. Of course, the Fed sets only short-term rates and the yield on the 10-year Treasury, the benchmark for mortgage rates, remains at a very low 2.16%.