Fears of a financial relapse were renewed this spring — as they were at this time a year ago — but the National Association of Realtors is attributing weakening home sale figures to a supply shortage. Sales of existing homes fell 1.5 percent last month to a seasonally adjusted annual rate of 4.55 million, according to NAR. The number of sales is still 9.6 percent greater than May 2011’s pace.
“The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand,” said Lawrence Yun, NAR’s chief economist. “The normal seasonal upturn in inventory did not occur this spring.”
Inventory stumbled 0.4 percent in May to 2.49 million existing homes, 6.6 months worth of supply at the current sales pace, up from 6.5 months in April, when existing sales rose 3.4 percent. The inventory has plummeted 20.4 percent in the last 12 months.
NAR also expressed optimism in rising prices and the continued ascent, on an annual basis, of home sales. The median price for an existing home was $182,600, up 7.9 percent over last May, and home sales have risen over the prior-year month in each of the last 11 reports.
“The recovery is occurring despite excessively tight credit conditions and higher downpayment requirements, which are negating the impact of record high affordability conditions,” Yun noted.
Though NAR’s data is closely watched by the financial industry, it’s been widely panned and the association admitted late last year it had to revise years worth of data due to errors in its analysis. — Adam Fusfeld