Existing Home Sales Down Less Than Expected
The National Association of Realtors reported Tuesday that sales of existing homes fell 3.8 percent from April to May and are down 15.3 percent from the previous May, when the market was still getting a boost from federal tax credits for home buyers. May sales, the NAR said, were at a seasonally adjusted annual pace of 4.81 million units, and April's figure was revised downward to 5 million. While lower than the precious month, the numbers reported are higher than most economist had projected.
Buyers continue to be kept on the sideline by difficulty obtaining credit and overall tough economic conditions. In addition, extreme weather in April prevented many potential home buyers from house shopping, leading to fewer closings in May. Fewer sales also mean more supply, and resulting lower prices. The national median price for homes sold in May was $166,500, down 4.6 percent from May 2010.
A large inventory of distressed properties on the market, which typically sell at a 20 percent discount from non-distressed homes, continue to pressure prices. The percentage of total sales accounted for by distressed properties in May was 31 percent, down from 37 percent in April.
The drop in existing home sales was the most pronounced in the Midwest, where they fell 6.4 percent, followed by the South with a 5.1 percent decline. Not surprisingly, these two regions were the areas hit by tornadoes and thunderstorms in April, preventing many potential buyers from searching for a home. Sales fell 2.5 percent in the Northeast, and sales were unchanged in the West, where distressed sales claim a higher share of the market and investors are very active.
|
