Economic Watch: Existing Home Sales Surge
Fueled partly by an increase in sales to first-time buyers, existing-home sales in May rose to their highest pace in nearly six years.


Fueled partly by an increase in sales to first-time buyers, existing-home sales in May rose to their highest pace in nearly six years, according to the National Association of Realtors on Monday.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.1% to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April.
Sales have now increased year-over-year for eight consecutive months and are 9.2% above a year ago.
"Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers," said Lawrence Yun, NAR chief economist. "However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated, even with higher mortgage rates above 4%."
Single-family home sales jumped 5.6% to a seasonally adjusted annual rate of 4.73 million in May from 4.48 million in April, and are now 9.7% above the 4.31 million pace a year ago.
Existing condominium and co-op sales increased 1.6% to a seasonally adjusted annual rate of 620,000 units in May from 610,000 units in April, and are 5.1% higher than May 2014.
May existing-home sales in the Northeast jumped 11.3% and are now 11.3% above a year ago. In the Midwest, existing-home sales rose 4.1% and are 12.4% above May 2014. Existing-home sales in the South increased 4.3% and are 6.9% above May 2014, while existing-home sales in the West climbed 4.3% and are 9% above a year ago.
The report follows a separate one from last week from the U.S. Commerce Department showing the number of building permits issued for new homes rose significantly in May, up 11.8% from the month before, pulling the annual pace of permits up to the strongest pace since 2007.
This strong monthly increase in May follows a similarly sized rise of nearly 10% the month prior.
Housing starts, on the other hand, fell significantly more than expected, down 11.1% in May from April, pulling the annual pace of starts down to 1.036 million, a two-month low.
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