WASHINGTON -- Americans snapped up houses in May almost as soon as properties were listed, fueling the strongest sales rate in nearly a decade.
Sales of previously owned homes rose 1.8 percent last month to a seasonally adjusted annual rate of 5.53 million, the highest level since February 2007, the National Association of Realtors said Wednesday.
People remain intent on buying homes, despite the low inventory of properties on the market that has caused prices to rise. The elevated demand likely stems from low mortgage rates and a relatively healthy jobs picture with U.S. unemployment at 4.7 percent, even with a recent slowdown in hiring.
"May's existing-home sales numbers suggest that healthy demand continues to support a recovering housing market, but that inventory woes are preventing a full recovery to pre-recession levels," said Ralph McLaughlin, chief economist at online real estate firm Trulia.
Homes sold in May after just 32 days on the market, the fastest pace ever measured by the Realtors association since it began tracking the figure in 2011. Homes stayed on the market on average for 40 days a year ago.
Sales rose in the Northeast, South and West last month but fell in the Midwest where real estate is generally considered more affordable.
The Federal Housing Finance Agency on Wednesday said U.S. home prices rose 5.9 percent in April from a year earlier as job growth spurred competition for a limited number of listings.
Prices climbed 0.2 percent on a seasonally adjusted basis from March.
Prices rose from a year earlier in all regions, led by the Pacific -- including California, Washington and Oregon -- with an 8.6 percent gain. The Middle Atlantic -- New York, New Jersey and Pennsylvania -- had the smallest increase, 1.7 percent.
"The housing market is clearly moving in the right direction, and it's going to contribute more to economic growth going forward," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pa. Still, "Inventories are very lean. That's going to come at the expense of future sales."
The sales gains have failed to persuade more current homeowners to list their properties. Many are still recovering equity lost during the housing crash. For some of them, a sale would fail to generate enough of a profit to cover the expense of buying a new house. The number of listings has fallen 5.7 percent from a year ago, meaning homebuyers have fewer and fewer options.
Homeownership rates have yet to improve despite the sales growth since the housing bust triggered a recession in late 2007. The national rate is close to a 48-year low of 63.5 percent.
But Americans still want to own houses if they can afford it, according to a separate report released Wednesday by the Harvard University Joint Center for Housing Studies. The pressures of student debt, rising rents and the leftover wreckage from the housing bust have restrained people's ability to buy.
Sales have been strong enough so far this year that the Realtors expect total sales to rise 3 percent from 2015, revising an initial forecast of nearly flat sales in 2016.
First-time buyers accounted for 30 percent of sales last month, well below the historic average of 40 percent.
Builders have increased construction, yet by focusing on higher-end properties they've done little to relieve the supply pressures. Single-family house starts have climbed 14.5 percent this year, according to the Commerce Department.
Low mortgage rates have helped drive demand. Mortgage buyer Freddie Mac, the Federal Home Loan Mortgage Corp., said the average 30-year fixed-rate mortgage dipped to 3.54 percent last week from 4 percent a year ago.
Information for this article was contributed by Josh Boak of The Associated Press and by Victoria Stilwell and Prashant Gopal of Bloomberg News.
Business on 06/23/2016