US home prices rise by largest share in 7 months

Home prices in the United States were up 3.6% year-over-year in May, the largest annual gain in 7 months.

Brokerage firm Redfin analyzed data from 85 of the largest US metros and says that only 6 showed a decline in their median prices year-over-year: San Jose (6%), New York (2.5%), Honolulu (2.2%), Orange County (-1.4%), Los Angeles (-0.8%) and Oakland (-0.7%).

But with affordability and inventory remaining a drag on the market, sales were flat with only a 0.2% gain year-over-year despite gains in 48 of the metros surveyed. Inventory saw its smallest gain in 8 months with a rise of 2.5%; new listings slipped 0.7% year-over-year.

"Recent surges in mortgage applications reflect the impact low rates are having on homebuyer demand nationwide,” said Redfin chief economist Daryl Fairweather. “We haven't yet seen a commensurate increase in U.S. home sales, and I don't expect sales to increase substantially in the long run,” Fairweather said.” That's because there still aren't enough homes for sale for all of the people who want to buy homes. Low rates and rising prices will likely lure sellers onto the market this summer, but the lack of new construction will continue to hold back sales growth."

The median number of days on market dropped to 36 days in May from 37 days a year earlier, the lowest number since Redfin began tracking the metric in 2000.

MBN

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