Existing-home sales reach 9-year high

Existing-home sales jumped 1.8% in May to reach their highest pace in nine years. Also noteworthy was an all-time high in median sales price, owing to a boost in demand and lagging supply levels.

Additionally, all major regions except for the Midwest saw strong sales increases last month, according to the National Association of Realtors.

Total existing-home sales reached a seasonally adjusted annual rate of 5.53 million in May from a downwardly revised 5.43 million in April. That means sales are up 4.5% from May 2015 and are at their highest annual pace since February 2007 (5.79 million).

The median existing-home price in May was $239,700, up 4.7% from May 2015.

"This spring's sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize," said Lawrence Yun, NAR chief economist. "With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now."

"Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer," added Yun.

Total housing inventory at the end of May rose 1.4% to 2.15 million existing homes available for sale, but is still 5.7%  lower than a year ago.

"Existing inventory remains subdued throughout much of the country and continues to lag even last year's deficient amount," adds Yun. "While new home construction has thankfully crept higher so far this year, there's still a glaring need for even more, to help alleviate the supply pressures that are severely limiting choices and pushing prices out of reach for plenty of prospective first-time buyers."

For the single-family market, home sales were up 1.9% to a seasonally adjusted annual rate of 4.90 million in May from 4.81 million in April, and are now up 4.7% year-over-year. The median existing single-family home price was $241,000 in May, up 4.6% from May 2015.