Existing Home Sales Reach 6-Month Low in May

A new report from the National Association of Realtors (NAR) has revealed sales of existing single-family homes and condos dropped to a six-month low in May. Sales fell 3.8 percent in the month to a seasonally-adjusted annual rate of 4.81 million, according to the report released on Tuesday.

Sales Mirror 13-Year Low

According to the NAR report, home sales have not been this low since November of 2010. While sales have been up and down so far this year, these numbers mirror the 13-year low in existing home sales seen in all of 2010, which was an annual rate of 4.91 million.

Because demand is low for existing homes, prices were low in May as well. According to the report, the median price of homes sold was down 4.6 percent from last year at $166,500. This is good news for those looking to take on a mortgage loan at a good price, but not-so-great news for homeowners looking to sell.

Decline in Line with Forecasts

Earlier Tuesday morning, Bloomberg News released a survey of 69 economists who predicted accurately that sales would drop to a six-month low. Their estimate of seasonally-adjusted sales was 4.8 million.

A senior economist at Moody’s Analytics Inc. told Bloomberg News, “The housing recovery is still looking pretty distant,” largely because buyers don’t have the confidence to buy or access to credit that they need to drive sales.

Existing home sales are needed to push the economy. Currently, they comprise about 94 percent of all purchases–an increase from 85 percent six years ago–largely because buyers are attracted to foreclosures and other distressed properties.

The Federal Reserve will meet this week when they are to discuss the state of the housing market. Because the market is still struggling, experts are expecting policy makers to say they will maintain record stimulus.