May Existing Home Sales Up 2.4 Percent, Less Than Expected (VIDEO)

WASHINGTON — Sales of previously occupied homes rose modestly from April to May, the third monthly increase this year, but signs of a housing recovery are fragile at best.

The National Association of Realtors said Tuesday that home sales rose 2.4 percent last month to a seasonally adjusted annual rate of 4.77 million, from a downwardly revised pace of 4.66 million in April.

WATCH CNBC's take on the numbers:

About one out of every three homes sold was a foreclosure or distressed sale. That helped drag down the median price to $173,000 _ 16.8 percent below a year ago. Falling prices coupled with new rules for property appraisers have caused many transactions to fall apart or be delayed.

"We have just been flooded with e-mails, telephone calls on the appraisal problems," said Lawrence Yun, the Realtors' chief economist.

The sales results missed economists' expectations, and stock markets headed lower on the news. Home sales had been expected to rise to an annual pace of 4.81 million units, according to Thomson Reuters.

One bright spot, however, was that the number of unsold homes on the market at the end of May fell 3.5 percent to nearly 3.8 million. That's a 9.6 month supply at the current sales pace.

That drop was "the best news in the report," said Joseph LaVorgna, Deutsche Bank's chief economist.

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Comments

[dcrinaz]

The article states the obvious and here is an example of the fact: "About one out of every three homes sold was a foreclosure or distressed sale. That helped drag down the median price to $173,000."

This is just illustrating why the Senate's decision and the Obama administration's refusal to support bankruptcy reform with cramdown was a stupid, stupid decision. Again, the only way to stop the problems in the housing market--which is so crucial for the economy to recover--is to allow troubled homeowners to declare bankruptcy on their primary home mortgages. Short of this, foreclosures will continue and keep suppressing housing prices, thus endangering the economic recovery.

But it seems that the 12 traitor Democrats and the Republicans in the Senate feel the only people who should have an economic recovery are the superwealthy and bankers. This is not the change we needed.

[gemzenith]

I heard that in some cases unsold homes are being torn down.Its not just prices that keep people from buying.Its getting a good mortgage from a stable and reputable bank.And then being able to secure a good paying job to make those payments.

[Troubledwawa]

Let's add the bank's shadow inventory to the amount of unsold homes, and see if that figure of a 3.5% decline, holds.

[olephart]

Home sales up? No, they're down from the same month last year. They're up from April (that was revised down) but home sales ALWAYS rise from January to June, level off in the summer and fall in the fall. Removing the spin the story is home prices and sales continue to fall.

[amdezurik]

about time the market got back to reality. house flippers artificially drove prices up up up now my county that had come to depend on those pumped up values is forced to devalue a ton of this year. now that is going to hurt...

[BurtonOerney]

It's nice to see that the knee-jerk, long-winded pontifications about how we've all been had are starting to die down. They're being reduced to parodies like nomorefed's spam. We'll see what happens in the next couple of months. 50- and 200-day moving averages indicate downward pressure on the stock market, or so I read.

[davidwayneosedach]

My isn't this a ray of hope! I guess the recession is over.

[CO Redhawk]

National news means very little. Housing, like politics is all local. There are some areas where the real estate market it actually getting hot. Those areas are ones that didn't have the huge run ups that many parts of the country had.

[nomorefed]

1st 100 days - There are 2.9 million more people unemployed in May than there were unemployed in January. The unemployment rate went from 7.6% to 9.4%.
Since May 2008, we have lost 5.5 million jobs. The biggest losers were:
Manufacturing 1.5 million lost
Finance & Prof Serv 1.5 million lost
Construction 1.1 million lost
Retail & Leisure 1.3 million lost

hat tip to http://www.iamned.comned.com"> for providing good finance and economics articles

where is the change? where is hope? why cant ppl find jobs?

[hearmeout]

Oh gosh you know what, you're right man!!! Obama should have instantly fixed every problem, even those that were decades in the making, because if his promise to change things was genuine then he obviously would have changed everything that was bad instantly into something good and given everyone a wonderful job, stopped all foreclosures in their tracks, ended poverty, war...

Except for the fact that we don't live in a fairytale. In the real world the challenges this country faces are not only complex but are decades in the making - i.e., the decrease in the savings rate from 10% in the mid-80s to negative a couple of years ago, the steadily rising level of household debt from the late 70s to the present, the fact that two of the largest speculative bubbles (equities & housing) occurred back-to-back to artificially inflate a GDP which has been otherwise shrinking for fifty years, and I could go on but (hopefully) you get the idea.

Anyone who believes that our problems are going to be magically cured any time soon is going to be sadly disappointed and possibly even leave pathetic posts like the one above. A situation that takes decades to create is not going to be solved in a hundred days - sorry to rain on your pity parade, dude. Couldn't resist.

[BurtonOerney]

People have to stop responding to this. It's posted on every business story today. It's an advertisement (and it got me too.)

[Cleanerman]

America's woes are based on greed. Greed from the little guy who wanted "more" home than he could afford all the way up to the super-greedy Wall Streeters. The brokers pushed their loans, too. But the "flippers" played a large role as well, of course. Speculation--as if there would be no end to price escalation.

I am far from the smartest guy in the world, but when friends of mine sold a suburban Sacramento, CA. 1400 sq ft condo for $450,000 before the "crash", I thought "How could this be?" I mean, I thought their little place was cute, but, it had nothing special--very plain with a plastic shower stall in the master bathroom--very low end fixtures throughout, cheap wall-to-wall carpet throughout. Only 1400 sq ft, mind you! In a plain suburb of Sacramento (Folsom). They had originally paid $155,000 for the place. I am not from California (only a visitor) and at the time of their purchase, I thought that was high! Anyway, I think whoever bought my friends home is now crying for sure. My friends lucked out. They now live in a nicer home in New Hampshire that they paid $275,000 for.

This is just an example. Multiply that out across the over-priced areas of the country and it is mind-boggling. No wonder things are so dire.

[gemzenith]

You must eat at fast food joints alot cuz you sure are looking for a quick fix.

[quindy]

Houses in the US are built of the cheapest materials not bricks and mortar. Therefore they collapse every time there is strong wind or flood. They have been overpriced for a very long time. Time to get real.

[desertman]

You can build a house out of brick and mortar if you want. There's no law against it......

[JoeBlough]

Housing prices still have to fall quite a bit to equal their value. When the average person can buy a house, then we will have reached equilibrium.

[wm2006]

You mean the average that doesnt outspend their budget and has a good job that they worked hard to get.

[desertman]

Yeah that one.

[KillTheMessenger]

Homes are still too expensive. No question about that. If we ever want to get the US economy off the ground, we have to stop real estate from being the nation's pension plan.