US Home Sales Rebound In May

Sales of existing US homes rebounded in May, the first increase in two months, with gains spread across the country while prices hit a new record, according to new data on Friday.

The result beat expectations and data for April was revised upward showing sales were flat compared to the prior month, according to the National Association of Realtors.

However, sales remain lower than May of last year while prices continue to rise and supply is struggling to keep up with demand.

Total sales of existing single-family homes, condos, townhomes and co-ops rose 2.5 percent from April, to an annual rate of 5.34 million, with the biggest gains posted in the Northeast and Midwest, NAR said.

And the median price rose again, reaching a new record high of $277,700, nearly five percent higher than last year, as buyers rushed to take advantage of lower lending rates. Sales were 1.1 percent lower than a year ago.

Lawrence Yun, NAR's chief economist, blamed "solid demand along with inadequate inventory of affordable homes."

The homebuilding sector has been struggling with a shortage of workers and has not been able to keep up with demand.

"More new homes need to be built," Yun said in a statement. "Otherwise, we risk worsening the housing shortage, and an increasingly number of middle-class families will be unable to achieve homeownership."

Prices for new homes also have been on the rise, and sales have been strong, but construction has been slow, which puts more pressure on existing homes.

The supply of existing homes for sale edged up to 4.3 months though Yun noted that houses don't stay on the market for long. (AFP)