Existing Home Sales Rise for Third Straight Month

Existing single-family home sales rose 1.9% in May, marking the third consecutive monthly rise, even though the purchase of foreclosed properties and first-time sales declined. The National Association of Realtors reported that sales of existing single-family homes rose to 4.25 million units (annualized) in May compared to 4.17 million in April. Compared to the same month a year ago sales fell 3%. NAR chief economist Lawrence Yun noted foreclosures and short sales accounted for roughly 33% of sales in May, down from 45% earlier in the year. Mr. Yun said the decline probably can be attributed to seasonal factors with more families entering the home buying market that are not interested in distressed properties. The percentage of buyers purchasing their first home fell to 29% of resales, down from a high of 50% in recent months. This is "puzzling" considering the availability of the first-time homebuyer tax credit, Mr. Yun said. Despite higher mortgage rates and other uncertainties in the market, NAR is still forecasting that existing home sales will be a "little better" in the second half. Meanwhile, the median price of an existing single-family home sold in May was $172,900, down 16.1% from a year ago.