US homes sell at strongest pace since 2007

Existing home sales rose 1.8% in May to a seasonally adjusted annual rate of 5.53 million, the highest pace in nine years according to the National Association of Realtors (NAR).

The median existing-home price is up 4.7% from a year ago to $239,700, the highest on record according to the realtors’ group.

Americans remain intent on buying homes, despite the low inventory of properties on the market that has pushed up prices.

Homes sold in May after just 32 days on the market, the fastest pace ever measured by the Realtors since they began tracking the figure in 2011.

Mortgage buyer Freddie Mac said the average 30-year fixed-rate mortgage dipped to 3.54 percent last week from 4 percent a year ago.

First-time buyers accounted for 32 percent of sales last month, well below the historic average of 40 percent. The Midwest is the lone state that saw sales of single-family homes drop, down -6.2% from the previous month. Short sales were on the market the longest at a median of 103 days in May, while foreclosures sold in 51 days and non-distressed homes took 30 days.

Sellers received a median of 97.5 percent of their original list price compared to 96.6 percent a year ago.

Lawrence Yun, NAR’s chief economist, credited this spring’s sustained period of ultra-low mortgage rates as “a worthy incentive to buy a home”.

May’s existing home sales pace was higher than expected, as economists surveyed by Reuters predicted a 1.1% rise. The median price in the Midwest was $190,000, up 4.8% from a year ago.

US home resales rose in May to a more than nine-year high as improving supply increased choices for buyers, suggesting the economy remains on solid footing despite a sharp slowdown in job growth last month.

After the report, EUR/USD was trading at 1.1327 from around 1.1311 ahead of the release of the data, GBP/USD was at 1.4764 from 1.4727 earlier, while USD/JPY traded at 104.60 compared to 104.58 before the release.

The higher existing home sales suggest an increase in brokers’ commissions, which should boost the residential investment portion of the gross domestic product report. The county with the biggest decrease was Piscataquis County, where the median sale price fell by 27.6 percent to $72,000. That number reflects only sales of existing homes. The median price in the South was $211,500, up 5.9 percent from a year ago. The national rate is close to a 48-year low of 63.5%. The nationwide median sale price in May was $241,000 – an increase of 4.6 percent from May 2015.