The National Association of Realtors said Wednesday existing home sales in the U.S. grew by 1.8%, the highest pace in nearly a decade. All major regions except for the Midwest saw strong sales increases last month.
“This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” said Lawrence Yun, NAR chief economist. “With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now.”
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, grew 1.8 to a seasonally adjusted annual rate of 5.53 million in May from a downwardly revised 5.43 million in April. Including last month’s gain, existing home sales are now up 4.5% from May 2015 (5.29 million) and are at their highest annual pace since February 2007 (5.79 million).
“Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer.”
Existing home sales in the Northeast increased 4.1% to an annual rate of 770,000, bring them to 11.6% on a year-over-year basis. The median price in the Northeast was $268,600, which is 0.1 percent below May 2015.
In the Midwest, existing home sales dropped 6.5% to an annual rate of 1.30 million in May, but are still 3.2% above May 2015. The median price in the Midwest was $190,000, up 4.8% from a year ago.
Existing home sales in the South grew 4.6% to an annual rate of 2.28 million in May, and are now 6.5% above May 2015. The median price in the South was $211,500, up 5.9% from a year ago.
Existing home sales in the West jumped 5.4% to an annual rate of 1.18 million in May, but are still 1.7% lower than a year ago. The median price in the West was $346,900, which is 7.7% above May 2015.