As homebuyer demand continues, May saw a 10.3% jump in sales over April and a 5.1% increase over May last year, which is slightly higher than the average year-over-year sales increase of 4.5% so far in 2016. The Median Sales Price in May was $222,475, a 4.2% rise from price levels one year ago and 3.5% above the median price in April. The inventory of homes for sale remains very tight in many markets across the country, with the May inventory 14.8% lower than May 2015. At the rate of home sales in May, the national Months Supply of Inventory was 3.0, down from 3.2 in April.
“May home sales increased at a rate that’s slightly higher than the average monthly increase. This is despite the fact that inventory in many markets remains very low. At the same time, interest rates appear to have stabilized, which helps encourage potential homebuyers. Price increases continue to moderate and are rising at a more sustainable rate. This market is offering current homeowners more incentive to sell, which could have a positive impact on overall inventory levels,” said Dave Liniger, RE/MAX CEO, Chairman of the Board and Co-Founder.
“Demand for housing, coupled with a lack of choice for buyers, pushed home values up yet again. This is a narrative we have heard for quite some time. Many owners aren’t moving on from their current homes, which is holding back available inventory for both first-time and move-up buyers. With values on the rise, this could prove to be an ideal time to sell – especially in the hot markets where owners could get more than they expected,” added Bob Walters, Quicken Loans, Chief Economist.
Closed Transactions – Year-over-year change
In the 52 metro areas surveyed in May, the average number of home sales was 5.1% higher than one year ago, and was 10.3% higher than the previous month. The sequential monthly increase was greater than the 8.5% average seen from April to May over the last seven years. Like previous months this year, home sales continued to be strong in the Northeast. Across the nation in May, 34 of the 52 metro areas surveyed reported home sales higher than one year ago, with 16 experiencing double-digit increases, including Augusta, ME +25.2%, Trenton, NJ +20.2%, Las Vegas, NV +18.5%, Richmond, VA +16.6%, Providence, RI +15.8% and Boston +14.3%.
Median Sales Price – Median of 52 metro median prices
The Median Sales Price for all homes sold in May was $222,475, up 3.5% from April, and up 4.2% from the Median Sales Price in May 2015. May is the 52nd consecutive month without a drop in price from the previous year. In 2015, the monthly average of year-over-year price increases was 7.6%. The 4.2% rise in May may mark a moderation in price increases, which would have a positive impact on home affordability. Among the 52 metro areas surveyed in May, only five had a year-over-year drop in prices. Two were unchanged and the remaining 45 metros reported higher prices than last year, with 7 rising by double-digit percentages, including Orlando, FL +13.5%, Portland, OR +13.0%, Fargo, ND +11.9%, Tampa, FL +11.4%, Nashville, TN +10.4% and Denver, CO +10.3%.
Days on Market – Average of 52 metro areas
The average Days on Market for all homes sold in May was 58, down 6 days from the average of 64 in both April 2016 and May 2015. May becomes the 38th consecutive month with a Days on Market average of 80 or less. In the three markets with the lowest inventory supply. Seattle, Denver and San Francisco, Days on Market was 29, 23 and 22 respectively. The highest Days on Market averages were seen in Augusta, ME 174, Des Moines, IA 103 and Burlington, VT 92. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Month’s Supply of Inventory – Average of 52 metro areas
The number of homes for sale in May was just 0.8% lower than in April, but 14.8% lower than in May 2015. The average loss of inventory on a year-over-year basis in 2015 was 12.2%. While inventory remains much lower than last year, there are signs of stabilization month-to-month. Based on the rate of home sales in May, the Months Supply of Inventory was 3.0, which is nearly identical to last month and last year, 3.2 and 3.6 respectively. A 6.0 months supply indicates a market balanced equally between buyers and sellers. The number of metros with a Months Supply of Inventory below 2.0 has jumped significantly. While January and February saw 5 and 6 metros below 2.0 and March and April both reported 11, May saw 10 metros with a supply less than 2 months, including Denver, CO 1.0, Seattle, WA 1.1, San Francisco, CA 1.2, Portland, OR 1.3, Boston, MA 1.5, Omaha, NE 1.5, Dallas-Ft. Worth, TX 1.6 and San Diego, CA 1.6.
