According to the National Association of Realtors, the median home price was $214,400 in May. This is an increase of 5.9% from the previous month and an increase of 5.1% from the previous year, when prices were $201,500 and $203,100, respectively. Year-over-year price gains have slowed in recent months due to higher levels of inventory and a slower pace of home sales than those in the previous year. This moderation in price should help keep affordability more stable in the near term.
The seasonally adjusted annual pace of home sales increased 4.9% from April to May, to 4.89 million homes. This is still 5.6% below the pace at this time last year, which in combination with higher levels of inventory has helped keep prices rising at a more sustainable pace than we saw the previous year. The pickup in home sales in May is further evidence that the market is recovering after the slow first quarter of 2014.
The number of homes available for sale increased only 2.2% in May to 2.28 million homes, which translates to 5.6 months of supply. Despite the increase in availability, the months of supply decreased from the previous month, as the increase in available homes did not keep pace with the rise in the pace of home sales. In the same month of last year there was 5.0 months of supply, meaning that buyers should have more options available this summer compared to the same time last year.
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