Existing Home Sales and Prices Jump:
The National Association of
Realtors reported today that May sales of homes that have been previously
occupied (the largest segment of homes) jumped 4.9% from April. Existing
Home Sales came in at an annualized rate of 4.89 million units which
handily beat the market expectations of 4.73 million units.
The median price rose to $213,400 which is a 5.1% increase over the past
year (May 2013 to May 2014).
The reason for the spike in sales? Is it interest rates? Nope, its
inventory. Home Sales had been suppressed even while fixed mortgage rates
hit their lowest levels for 2014 due to a very tight supply of homes
available for sale. Since home prices have been increasing at a
moderate pace, many homes that were "under water" are now back into
positive equity and these homeowners are now finally able to put their
homes on the market.
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