The housing market continued to flounder in May, as existing home sales fell to a six-month low.
Existing home sales dropped 3.8 percent to a rate of 4.81 million in May, down from 5.0 million in April, according to the National Association of Realtors. It marked the second straight month in which home sales dropped.
“Spiking gasoline prices along with widespread severe weather hurt those shopping in April, leading to soft figures in May,” said NAR chief economist Lawrence Yun in a press release.
This explains, at least in part, why home sales were softer in the Midwest, where severe weather kept homebuyers at bay. But the most prevalent problem remains excessively strict credit regulations, Yun said.
“Even with recent economic softness, this is a disappointing performance with home sales being held back by overly restrictive loan underwriting standards,” he said.
Still, if there’s any silver lining for homeowners, it’s that sales were not as bad as some analysts expected. Economists polled by Reuters expected sales to drop 5.9 percent, or to a 4.8-million-unit sales pace. (March numbers were initially reported at 5.05-million units.)
For homebuyers who can qualify for a loan in today’s lending environment, both prices and mortgage rates are teetering near historic lows.
The national average commitment rate for a 30-year fixed mortgage was 4.64 in May, down from 4.84 percent in April, according to Freddie Mac. Meanwhile, the national median existing-home price was $ 166,500 in May, down 4.6 percent from a year ago.
These AOL Real Estate guides can help, no matter whether you choose to buy or sell:
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First-Time Homebuyer’s Guide
- How to Shop for Your First Home
- How to Price a Home to Sell Fast
- How to Get a Low Mortgage Rate
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