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Economy in Brief

U.S. Existing Home Sales and Prices Were Strong in May
by Carol Stone  June 20, 2012

Existing home sales surged 4.2% in May, producing a substantial 12.9% gain y/y to a 5.180M annual rate, according to data compiled by the National Association of Realtors. This was the largest number of sales since the 5.440M of November 2009, which reflected a special temporary tax benefit. Consensus expectations had projected 5.000M. Sales of existing single-family homes alone came to 4.600M, up 5.0% m/m and 12.7% y/y. (These data have a longer history than the total sales series.) Sales of condos and co-ops actually decreased 1.7% m/m to 0.580M but were still 12.7% above the year earlier.

Sales rose in all four regions of the country. The Midwest had the largest monthly gain, 8.0%, to 1.210M (+16.3% y/y). Sales rose 4.0% in the South to 2.090M, up 16.1% y/y. Those in the West were up 2.5% to 1.230M (+7.0% y/y) and those in the Northeast increased 1.6% to 0.650M, 8.3% ahead of May 2012. (All amounts are seasonally adjusted annual rates).

The median price of an existing home was up 8.4% in May to $208,000, a substantial 15.4% from May 2012. This is once again the highest price reading since August 2008 and the first time since then above $200,000. The peak was $230,300 in July 2006.

With the gain in sales, the supply of homes on the market edged down in May to 5.1 months from 5.2 months at the end of April. The number of homes for sale did rise, by 3.7% to 2.220M from 2.150M for April, but the increase was smaller than the gain in sales, pushing down on the months' supply measure. The number of homes for sale was 10.1% below a year ago. For single-family homes alone, the supply was unchanged at 5.2 months of sales. The number was 1.980M compared to 1.910M at the end of April and 9.2% below May 2012. .

Reported earlier this month, the composite index of home price affordability for April fell 4.8% m/m, which was also the size of the decline from a year ago. The lower affordability number is to be expected as interest rates and home prices both rise; the mortgage rate edged up to 3.69% in April from 3.66% in March, and the monthly payment rose from 13.0% of income in March to 13.7% in April.

The data on existing home sales, prices and affordability can be found in Haver's USECON database. The regional price, affordability and inventory data are available in the REALTOR database. The expectations figure is from the Action Economics survey, reported in the AS1REPNA database.


Existing Home Sales (Thous, SAAR)
May Apr Mar Y/Y% 2012 2011 2010
Total 5,180 4,970 4,940 12.9 4,661 4,278 4,183
    Northeast 650 640 630 8.3 596 543 563
    Midwest 1,210 1,120 1,160 16.3 1067 918 909
    South 2,090 2,010 1,970 16.1 1,833 1,683 1,626
    West 1,230 1,200 1,180 7.0 1,165 1,133 1,084
Single-Family Sales 4,600 4,380 4,330 12.7 4,130 3,793 3,705
Median Price Total ($, NSA) 208,000 191,800 183,900 15.4 175,442 164,542 172,442
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