Existing Home Sales Dip in May But Remain at Elevated Levels

Following two consecutive months of increases, existing-home sales fell slightly from April to May but were still significantly higher than year-ago levels

According to the National Association of Realtors report, existing-home sales were at a seasonally adjusted annual rate of 5.66 million units in May, down 2.2 percent from an upwardly revised surge of 5.79 million units in April. However, May 2010 closings were a whopping 19.2 percent above the 4.75 million-unit level of May 2009.

Although overall sales activity dipped on a month-to-month basis, NAR said existing-home sales were still at elevated levels in May due to buyer response to the tax credit. And Lawrence Yun, NAR chief economist, said he expects home sales to remain at these high levels for one more month.

As for prices of existing homes, NAR’s report was positive. According to the association, the national median existing-home price for all housing types was $179,600 in May, up 2.7 percent from the same month last year.

The positive growth in existing-home prices was partially due to a drop in distressed home sales. NAR said distressed homes slipped to 31 percent of sales in May. This was down 2 percentage points from the month prior and one year earlier when distressed homes made up 33 percent of sales.