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US existing home sales surge in May

Sales of existing homes, the bulk of the US housing market, surged higher in May as price growth eased, industry data released on Monday showed.

WASHINGTON: Sales of existing homes, the bulk of the US housing market, surged higher in May as price growth eased, industry data released on Monday showed.

The National Association of Realtors said total existing home sales rose 4.9 per cent to an annual rate of 4.89 million units in May, from April's 4.66 million unit pace.

Sales of existing homes have rebounded for two straight months from the first-quarter slump, in part blamed on bad winter weather in large areas of the country.

May's sales of single-family homes, townhomes, condos and co-ops came in stronger than analysts' expectations of a pace of 4.80 million units. But they were 5.0 per cent below the year-ago rate.

The housing market recovery has sputtered for more than a year under pressure from higher mortgage interest rates, lack of inventory that pushed prices higher, and high unemployment.

"Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year," said Lawrence Yun, NAR chief economist.

"Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates."

Inventory rose 2.2 per cent to 2.28 million homes, to a 5.6-month supply at the current sales pace, down a tenth point from April.

The median price was US$213,400, up 5.1 per cent from a year ago.

"This is the strongest pace of sales since October 2013 and reinforces our expectation of a pickup in housing activity in the second half of the year following a soft Q1 that was affected by unusually severe winter weather," said Barclays analyst Cooper Howes in a research note.

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