Existing-home sales in May hit their highest level since November 2009 when a tax stimulus was fueling sales, according to the National Association of Realtors.
May’s seasonally adjusted annual sales rate of 5.18 million units was up 12.9 percent from 4.59 million units in May 2012 and up 4.2 percent from 4.97 million units in April, NAR reported.
“The housing numbers are overwhelmingly positive. However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new-home construction ramps up quickly by an additional 50 percent,” NAR Chief Economist Lawrence Yun said in a statement. “The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth.”
Meanwhile, listed housing inventory rose 3.3 percent to 2.2 million existing homes in May, representing a 5.1-month supply of homes at the current rate of home sales, NAR said. That’s down from 5.2 months in April.
Inventory was 10.1 percent below a year ago, when there was a 6.5-month supply, NAR said.
The inventory shortage is sparking bidding wars, and homes are selling like hotcakes in some markets.
The median time on market for all homes was 41 days in May, the shortest since monthly tracking began in May 2011. That’s down from 46 days in April and 72 days a year ago, NAR said.
Another way to look at the data: Homes are selling a whopping 43 percent faster than they were last year.
Is your market starved for inventory?