Existing home sales jumped 20.7% since last month, thanks to low interest rates and rising economic activity. It was the largest monthly gain on record, according to the National Association of Realtors, but still 11.3% lower than June of last year. Sales rose 4.3% in the Northeast region, 11.1% in the Midwest, 26% in the South, and 31.9% in the West.
A lot of that demand came from people looking to get some distance from their neighbors. Think families moving to the suburbs, apartment dwellers buying a first home, and wealthy families looking for second homes. The count was based on closings, meaning that contracts would have been signed in April or May.
Home sales probably would have risen more, but there weren’t enough homes to sell. According to the National Association of Realtors, the supply of existing homes has declined by 18.2% year over year. Level-wise, there were 350,000 fewer available homes this year than last year. People are leery of having strangers tour their homes, and have been cautious about putting them on the market. The reduced supply of homes and strong demand has created a serious sellers market, and caused median home prices to rise 3.5% annually, to $295,300.
The short supply of existing homes has been a boon to new home sales. New home purchases rose 17% in May, the most recent data available.
Existing home sales fell 8.5% monthly in March, 17.8% monthly in April, and 26.6% in May.