Washington: With purchasing power bolstered by falling mortgage rates, the National Association of Realtors released a report on Friday showing a bigger than expected jump in U.S. existing home sales in the month of May.
NAR said existing home sales surged up by 2.5 percent to an annual rate of 5.34 million in April, while revised data showed existing home sales in April were unchanged at a rate of 5.21 million.
Economists had expected existing home sales to increase by 1.2 percent to a rate of 5.25 million from the 5.19 million originally reported for the previous month.
“The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,” said NAR chief economist Lawrence Yun.
The report said the median existing home price for all housing types was $277,700 in May, up 4 percent from $266,900 in April and up 4.8 percent from $265,100 in May of 2018.
Total housing inventory increased to 1.92 million existing homes available for sale at the end of May, representing 4.3 months of supply at the current sales pace.
NAR said single-family home sales spiked by 2.6 percent to an annual rate of 4.75 million, while existing condominium and co-op sales jumped by 1.7 percent to a rate of 590,000.
Next Tuesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.
Why Markets Care About Existing Home Sales Also Called Home Resales
Existing Home Sales report is released monthly, about 20 days after the month ends, by the National Association of Realtors (NAR).
It measures annualized number of residential buildings that were sold during the previous month, excluding new construction. While this is monthly data, it’s reported in an annualized format (monthly figure x12).
The Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and gives breakdowns for the West, Midwest, South, and Northeast regions of the country. These figures include condos and co-ops, in addition to single-family homes.
Existing Home Sales is a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction.