Home Sales Soar as Inventories Grow

Home prices have regained nearly half of the value lost since prices peaked in June 2006 and prices rose 1.5 percent last month and 4.5 percent above January prices. Existing-home sales in the West increased 2.5 percent to a pace of 1.23 million in May and are 7.0 percent above a year ago. With the tightest regional supply, the median price in the West was $276,400, up 19.9 percent from May 2012, according to the National Association of Realtors. Sales have stayed above year-ago levels for 23 months, while the national median price shows 15 consecutive months of year-over-year increases. The same rising prices that are boosting inventories also drove investors out of the market, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The investor share of home purchases tumbled from 22.0 percent in April to 20.2 percent in May based on a three-month moving average. That was the sharpest drop in investor activity recorded in more than three years. According to NAR, Individual investors purchased 18 percent of homes in May; they were 19 percent in April. Both current homeowners and first-time homebuyers increased their participation in the home purchase market between April and May. Current homeowners accounted for 43.8 percent of home purchases last month while first-time homebuyers represented 36.0 percent in May, HousingPulse results showed.