U.S. home resales fell in May and the median sales price rose only because of a drop in sale of lower priced homes, casting a shadow on the country’s nascent housing market recovery.
The National Association of Realtors said on Thursday that existing home sales slipped 1.5 per cent to an annual rate of 4.55-million units last month. That was in line with analysts’ expectations.
Nationwide, the median price for a home resale rose to $182,600 (U.S.) in May, up 7.9 per cent from a year earlier and the highest since June, 2010.
“I would attribute this primarily to the shortage of inventories on the lower priced homes,” Lawrence Yun, the NAR’s chief economist, told reporters.
Mr. Yun said sales of homes costing at least $250,000 were up more than 20 per cent from a year earlier, but that sales declined for homes priced under $100,000.
While the broader U.S. economy appears to be losing steam, housing has gained traction and has become a relative bright spot.
Despite a sharp slowdown in hiring across the country, home prices appear to be stabilizing and home builder sentiment has risen to a five-year high. Groundbreaking at building sites for new homes has held above a 700,000-unit annual rate for the last five months, a first since 2008.
There were also positive signs within the NAR report on Thursday. Distressed sales, which include those due to foreclosure, accounted for 25 per cent of resales. That was the lowest level since the NAR started keeping track in 2008.
Economists polled by Reuters had expected sales at a 4.57-million-unit sales pace last month.
Inventories slipped to 2.49-million, which represents a 6.6 month supply at the current sales pace.