The National Association of Realtors announced today that existing home sales fell 3.8 percent from April to May nationally. Home sales across the country were down 15.3 percent from May, 2010, according to the association’s figures.
That’s the lowest existing home sales have been since November, according to the association.
Local home sales were in keeping with national trends. The Pikes Peak Association of Realtors reported a 12.2 percent decline in sales from 780 in May, 2010 to 748 this May in the Colorado Springs area.
Lawrence Yun, chief economist for the National Association of Realtors reported in a release from the association that he believes temporary factors held back the market in May.
“Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” Yun said. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”
Nationally, first-time buyers purchased 35 percent of homes in May, down from 36 percent in April and 46 percent in May 2010, according to the association’s release. There was an $8,000 first-time home buyer tax credit in place in May, 2010, which could have driven the figure up. But in a healthy housing market, economists say first-time buyers account for almost half of home sales. Investors accounted for 19 percent of purchase activity in May compared with 20 percent in April and 14 percent in May, 2010, according to the association release.
Interest rates are at their lowest now as well, according to the association’s release. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.64 percent in May, down from 4.84 percent in April and 4.89 percent in May 2010.
“Although low mortgage interest rates are welcome, they are less meaningful compared to the tightness of loan underwriting standards,” Yun was quoted in the release.