The latest National Association of Realtors1 report shows new and existing homes2 are in short supply across most regions. Have you had a hard time bidding for a home recently? Grab your coffee and read below to learn how the rates have fluctuated in the housing market.
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New Home Sales
Sales of new single‐family houses dropped 5.9 percent below the revised April rate of 817,000 but are 9.2 percent above the May 2020 estimate of 704,000. This is according to the recent reports provided by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
“It takes 4 months to establish a trend for new houses sold,” according to the Census Bureau news release. With the current trend of new single-family houses, it represents a 5.1-month supply of homes in the latest report. “A severe lack of new construction and prolonged underinvestment [have led] to an acute shortage of available housing,” states the NAR and the Rosen Consulting Group in a news release. "As outlined in last week's NAR/Rosen Consulting Group report, we continue to face a dire shortage of available housing in this country," said NAR President Charlie Oppler.
The NAR/Rosen Consulting Group outlined a strategy to combat the shortcoming of newly available homes. It includes incentives, addressing shortages, and advancing affordable housing. Read more at NAR/Rosen Consulting Group report.
The Region on Existing Home Sales
The Midwest was the only area to experience higher sales from the prior month with a 1.6% increase in May, a 27.2% increase from a year ago. The West experienced a fall in existing home sales at 4.1%, still 61.6% higher from a year ago. The South declined by 0.4% but has a 47.2% increase from last year. Lastly, the Northeast decreased 1.4% in May but has a 46.9% growth from a year ago.
“As we stated last month, even if demand begins to weaken, we’ll still be far from a buyer’s market since the demand for real estate remains at an unprecedented level,” said ShowingTime Chief Analytics Officer Daniil Cherkasskiy on their blog.
"Home sales fell moderately in May and are now approaching pre-pandemic activity," said Lawrence Yun, NAR's chief economist. "Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market. "The market's outlook, however, is encouraging," Yun continued. "Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes."
The June report is looking to be more successful as supply is meant to improve.
1 The National Association of Realtors® is America's largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.
2 existing-home sales, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes.