US home sales surge to fastest pace this year despite rising mortgage rates, prices

Washington DC [US], June 10: Sales of previously occupied US homes accelerated last month to their fastest pace since December, a sharp turnaround in demand after a lackluster start to the spring homebuying season.
Existing home sales rose 3.2 percent in May from the previous month to a seasonally adjusted annual rate of 4.17 million units, the National Association of Realtors said Tuesday. Sales also rose 3.2 percent compared with May last year.
Home sales increased from a year earlier in the Midwest, South and West, but fell in the Northeast, NAR said.
The latest sales figure topped the roughly 4.07 million pace economists were expecting, according to FactSet.
Home sales have been mostly hovering close to a 4-million annual pace going back to 2023, far short of the historic norm that is closer to 5.2-million.
Sales rose last month even as mortgage rates have continued to mostly trend higher this spring, although they remain below where they were a year ago. Home prices continued to rise nationally last month. The US median sales price increased 1.3 percent in May from a year earlier to $429,300, an all-time high for any May on data going back to 1999, NAR said. Home prices have risen on an annual basis for 35 months in a row. Even so, home price growth is now lagging income growth in many areas.
That, plus mortgage rates holding below where they were this time last year, is helping to improve affordability, giving the housing market momentum, said Lawrence Yun, NAR's chief economist.
"I cannot definitively say if home sales are truly coming out of the slump, because we know that there's still uncertainty related to the oil prices or how the mortgage rates will move," Yun said, adding that he expects home sales will emerge from their multi-year slump if the average rate on a 30-year mortgage drops back closer to 6 percent.
Source: Qatar Tribune