Home sales eclipse 5 million mark for first time since 2009

The tax credit boosted sales in the fall of 2009, pushing them to 5.44 million that November. The last time they had hit that level was in the summer of 2007. 

Prices are increasing along with sales as inventory remains low. 

The median price of a home rose to $208,000 in May, up 15.4 percent from May 2012 and the highest level since July 2008. 

May marks six straight months of double-digit price increases, representing the strongest price gain since October 2005.

“The housing numbers are overwhelmingly positive," said Lawrence Yun, NAR chief economist.  

"However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent,” he said. 

NAR is expecting limited housing inventory for the rest of the year. 

“The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth."

Total housing inventory rose 3.3 percent to 2.22 million existing homes available for sale at the end of May, which represents a 5.1-month supply at the current sales pace, down from 5.2 months in April.

Listed inventory is 10.1 percent below a year ago, when there was a 6.5-month supply. The median time on market for all homes was 41 days in May, down from 46 days in April. That is down from the 72 days on market a year ago.

Distressed homes — foreclosures and short sales — accounted for 18 percent of May sales, unchanged from April, but matching the lowest share since monthly tracking began in October 2008. They were 25 percent in May last year.  

Fewer distressed homes, which generally sell at a discount, account for some of the price gain, NAR said.

The latest mortgage rate for a 30-year loan fell slightly to 3.93 percent last week, down from 3.98 but is near the highest level of the year, although still hovering around historic lows, Freddie Mac reported on Thursday.

Meanwhile, sales rose across all four regions. 

Sales were up 1.6 percent in the Northeast, 8 percent in the Midwest, 4 percent in the South and 2.5 percent in the West.