June 22, 2012 (Chris Moore)

Completed transactions of existing home purchases took an unexpected tumble in May but still remained above last year’s levels while home prices continued to strengthen according to the National Association of Realtors® (NAR).

Monthly existing home sales, which include single-family homes, townhomes, condos, and co-ops, fell to a seasonally adjusted rate of 4.55 million in May, down from 4.62 million in April, a loss of 1.5 percent. Compared to May of last year, sales were still 9.6 percent higher than the 4.15 million seasonally adjusted transactions. It was the 11th consecutive month that year-over-year home sales have increased.

Lawrence Yun, chief economist of NAR, stated, “The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand. The normal seasonal upturn in inventory did not occur this spring. Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier.”

Regional Home Sales:

Monthly existing home sales in the Northeast declined by 4.8 percent to an annual rate of 590,000 sales but were 7.3 percent higher than in May of last year, while in the Midwest, sales edged up one percent from the previous month, selling at a rate of 1.04 million annual sales, and were 6.4 percent higher than last year’s sales pace.

In the South, monthly existing home sales declined a modest 0.6 percent in May at an annual pace of 1.78 million transactions but were 9.2 percent above May 2011’s levels, and in the West, transactions for the month fell by 3.4 percent to an annual rate of 1.14 million sales and were 3.6 percent higher than last year’s sales pace.

Home Prices:

Monthly home prices increased 2.9 percent as the national median existing home price increased from $177,400 in April to $182,600 in May. The median home price in May was 7.9 percent higher than in the same month last year, the third consecutive month that home prices have surpassed the previous year’s levels.

The median price in the Northeast was $250,700, which was 3.8 percent higher than a year ago but down from $256,600 last month, while the median price in the Midwest was $147,700, up 6.4 percent from May of 2011 and up from $141,700 last month.

In the South, the median price was $159,700, a gain of 9.2 percent from a year ago and up from $153,400 last month, and in the West, the median price was $233,900, up 13.4 percent from May of 2011 and up from $221,700 the previous month.

Cash and Distressed Property Sales:

Distressed property sales accounted for 25 percent of all existing home sales in May, down from 28 percent in April and down from 31 percent in May of 2011. Foreclosure sales made up 15 percent of all existing home sales while short sales accounted for 10 percent of all existing sales.

Cash sales accounted for 28 percent of all sales in May, down from 29 percent in April, while investors jumped in and purchased 17 percent of the homes sold in May, down from 20 percent in April.

Housing Inventory:

The number of homes available for sale in May edged down 0.4 percent to 2.49 million homes which represents a 6.5 month supply, down from a 6.6 months supply in April.

Tags: existing home sales, investors, distressed property sales, declining prices, low appraisals, cancelled contracts, median home price