Home Resales Rise 2.4 percent in May to annual rate of 4.77 million

2009 June 23

June 23 2009 - Existing home sales in the U.S. rose in May for a second month as record foreclosures caused prices to drop.

Purchases increased 2.4 percent to an annual rate of 4.77 million, lower than forecast, the National Association of Realtors said today in Washington. The median price fell 17 percent, the third-largest decrease on record.

Tax breaks for first-time buyers in the Obama administration’s stimulus plan, falling property values and lower mortgage rates have helped support the market. At the same time, any recovery is likely to be limited with unemployment rising and borrowing costs shooting back up.

“We’re seeing some signs of stability,” Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida, said before the report. “A lot is going to depend on mortgage rates if they stay low. You’re still looking at a lot of supply out there and it’s going to take a long time to work through all of that.”

Economists forecast existing sales would rise to a 4.82 million rate, according to the median of 74 projections in a Bloomberg News survey. Estimates ranged from 4.6 million to 5 million. April’s reading was revised down to a 4.66 million pace from 4.68 million.

May’s sales pace was the strongest since October and last month’s gain marked the first back-to-back increase since 2005.

May traditionally is one of the top three sales months of the year as the weather turns warmer and families prepare to move before the start of the next school year, according to the NAR. The group adjusts the figures for these seasonal variation in order to facilitate month-to-month comparisons.

Sales were 3.6 percent compared with a year earlier.

The number of houses on the market dropped 3.5 percent to 3.8 million in May, NAR said. At the current sales pace, it would take 9.6 months to sell those homes, compared with 10.1 months in April.

The median price of an existing home fell to $173,000 in May from $207,900 a year earlier, the NAR said. The price has fallen as sales slumped and financial institutions auctioned off foreclosed properties.

Home resales in U.S. rise 2.4% in May to 4.77 million rate

May Existing-Home Sales Continue Rising Trend
May 2009 Existing Home Sales Rise

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