By Canadian Press

US home sales climbed 2.5% in May amid lower mortgage rates

Jun 21, 2019 | 7:09 AM

WASHINGTON — U.S. home sales jumped 2.5% in May, as lower mortgage rates appeared to help buyers overcome affordability challenges.

The National Association of Realtors said Friday that existing homes sold at a seasonally adjusted annual rate of 5.34 million last month, up from 5.21 million in April.

The recent gains likely came from reduced borrowing costs that made it easier to finance a home. Rates for the 30-year mortgage are averaging 3.84% this week, down sharply from 4.57% a year ago, according to the mortgage buying company Freddie Mac.

Still, the real estate market has yet to shake off last year’s slump. Home sales fell 1.1% from a year ago.

The faster pace of sales also boosted prices. The median sales price in May was $277,700, a 4.8% increase from last year.

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More homes have come onto the market in the past year, but it’s been insufficient to inject a meaningful amount of inventory that would give would-be buyers more choices.

Sales listings have increased 2.7% from a year ago to 1.92 million homes. But the market contains a mere 4.3 months’ supply of properties, well below the six months that were once deemed to be a sign of a healthy market.

Over the past year, homes prices between $250,000 and $750,000 experienced the strongest sales growth.

But sales of homes at cheaper price points have been flat or falling, a sign that the lack of entry-level homes has been an obstacle for would-be buyers.

Josh Boak, The Associated Press