Home Economy RE/MAX: May’s Brisk Home Sales Set Post-recession Records

RE/MAX: May’s Brisk Home Sales Set Post-recession Records

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                RE/MAX: May's Brisk Home Sales Set Post-recession Records

After a brief dip in April home sales, the U.S. housing market returned to seasonally high sales in May, increasing 20.6% from the previous month and 4.3% from May 2016, according to the RE/MAX National Housing Report.

In fact, it was the strongest May in terms of home sales in the nine-year history of the report. 

"In May, we saw an uptick of both loan applications and home sales, which is encouraging in terms of more people getting into the market for homes," said Adam Contos, RE/MAX Co-CEO.

"We don't expect that the Federal Reserve's announcement on Wednesday to raise interest rates a quarter of a point will greatly affect the market's momentum. But housing demand only intensifies the tug-of-war with tight inventories driving prices up."

Other notable numbers:

Over two-thirds of the metro areas experienced an increase in transactions.
The May 2017 Median Sales Price of $232,500 was the second highest in the history of the report, only behind the August 2008 Median Sales Price of $236,062.
Decreasing 16.2% from May 2016, inventory continued to decline year-over-year. This is the 103rd consecutive month of year-over-year declines dating back to October 2008.
The U.S. continues to enjoy rising home values as 52 of the 53 metro areas experienced a price increase.

Although any bright clouds in the homeownership discussion may have a cloudy lining.

Millions of poor Americans face the hard decision to spend less on food and healthcare because the bulk of their paychecks go to keeping a roof over their head, a report from the Joint Center for Housing Studies of Harvard University released on Friday showed.

Based on income, 70.3 percent of the poorest families, or those earning less than $15,000 annually, spent more than 50 percent of their wages on rent or costs to own a home in 2015, according to the latest annual study.

"Households paying half their incomes or more for housing have little money left over to cover other basic necessities," Harvard researchers wrote, Reuters reported.

These low-income families on average spent 53 percent less than those without such cost burdens from housing in 2015, the report showed.

For example, when these households had children, they spent under $300 a month on food, compared with nearly $500 for households which were not spending more than half their income on housing.

Meanwhile, the poorest seniors who spent more than half of their income on housing spent only $99 a month on medications and other healthcare services in 2015, compared with $263 a month among those who were not severely burdened by rent or expenses to own a home.

This struggle has persisted even as the housing market has recovered during its second longest ever U.S. expansion.

The fall in U.S. homeownership may have reached a bottom following 12 years of decline. Home prices surpassed the high of a decade ago in 2016, the Harvard report showed.

(Newsmax wire services contributed to this report).

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