June 21, 2017 – Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built. Existing home sales give an indication of demand for housing. While home resales may not generate new construction jobs like those that housing starts do, they have a similar effect on consumer spending as people purchase items for their new home.
Existing home sales rose 1.1% in May to an annualized rate of 5.620 million. This comes in above the expectation of an annualized rate of 5.550 million and April’s downwardly revised 5.560 million level. Both single-family homes and multi-family resales are up, 1.0% and 1.6%, respectively. Single-family sales grew 2.7% year-over-year and multi-family grew 3.2%. The median price rose 3.2% in May and 2.7% from the last year. Supply increased again to 1.960 million, the month’s supply is at 4.2 months, down from 4.7 months a year ago. The average number of days on the market was down to 27 days in May, from 29 days in April and the shortest timeframe since 2011.
Supply is still not increasing fast enough as the median sales price hit a new peak and the median days on the market hit a new trough. The 4.2 months of supply remains well below the 5-month benchmark. We are looking for an increase in supply as residential construction spending continues upwards and consumer demand for homes are still strong.