Home sales up, but only slightly

Good news is a rare treat in this housing market. Today’s National Association of Realtors report is at least mildly positive. It shows that existing home sales rose 2% in May to an annualized pace of 4.99 million compared to the April pace (But nearly 16% below May 2007 pace).

Sales could be picking up, especially in states like Nevada, California and Arizona because investors, first-time buyers and others are jumping on the low prices available for foreclosed homes. But the sales increase is small and the monthly home sales pace has stayed pretty close to 5 million since the credit crisis began last August.

The inventory of unsold homes in May did indeed fall by 1.4% to 4.49 million homes, which is a 10.8 months’ supply at the current pace of sales. But 10.8 months is still a huge number, about twice what it should be in a more stable market.
 

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