Washington, DC, United States (4E) – Sales of previously owned homes in the U.S. rose in May, the largest monthly sales increase in nearly three years, signaling an improving residential real estate market after a slowdown in the first few months of the year.
On a seasonally adjusted basis, existing home sales gained 4.9 percent last month to an annual pace of 4.89 million homes, according to the National Association of Realtors (NAR) report released Monday. The figure was the best performance since October, the last time annual sales breached the five-million mark.
As employment strengthens, Americans are more encouraged to buy due to smaller price increases, low interest rates on mortgage loans and a more diverse selection of properties.
Compared with the year-earlier figures, sales level in May dropped 5 percent and the recent gains could be slowed if borrowing costs begin to rise, as many economists predict. Due to the slow start this year, the NAR forecasts a 3 percent decline in sales this year compared with last year’s total of 5.09 million.
On the supply side, the number of previously owned homes on sale rose 6 percent from the previous year to 2.28 million, the highest since August 2012. It would take 5.6 months to sell those homes at the current sales pace, compared with 5.7 months at the end of the previous month.