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Summary
- The industry experts said that the available homes for sale, as per May data, would last only two and a half months at the current pace of sales.
- The overall housing inventory was 1.23 million units in May, while it was 1.55 million units in the corresponding period of 2020.
- The month also saw a fourth consecutive decline in home sales of previously owned houses. However, sales rose 44.6% from a year earlier when covid wreaked havoc across the US.
The average US home prices rose by a record 23.6% to US$350,300 in May from a year earlier as the number of available homes for sale declined amid a robust surge in demand.
The demand spiked as mortgages rates fell to record levels during the period. However, the rising home prices have kept new homebuyers away from the piping-hot property market, say industry experts.
The month also saw a fourth consecutive decline in home sales of previously owned houses. However, sales rose 44.6% from a year earlier when covid wreaked havoc across the US.
Concurrently, existing-home sales dropped 0.9% from a month earlier at an annual rate of 5.8 million, the National Association of Realtors (NAR) said on Tuesday.
The median home price in May was the highest yearly price appreciation as per NAR’s record dating back to 1999. In addition, the average home prices had climbed above the US$300,000 mark for the first time in July 2020.
Besides, the number of homes for sale on the market was significantly lower vis-a-vis the demand, contributing to the price spike. Homes were also selling quickly, which is within a fortnight of putting them on the market, the experts said.
Consequently, buyers with limited cash for down payment kept away from the housing market, while almost half of homebuyers in April made down payment of around 20% of the total home cost, the NAR survey showed.
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Source: Pixabay.
Housing inventory in May
The number of homes for sale in May was down 20.6% year on year, but it was up 7% compared to the figure in April. The industry body added that the available homes for sale at the end of May would last only two and a half months at the current sales pace.
In May, the overall housing inventory was 1.23 million units, while in the corresponding period of 2020, it was 1.55 million units.
In addition, first-time buyers accounted for 31% of sales in May, which was a decline of 34% from the same period in 2020. Individual home investors were responsible for 17% of home sales in the month, increasing 14% YoY. All-cash home sales transactions accounted for 23% of sales, a decline of 25% from the figure in April.
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