ST. JOSEPH — The peak season for the housing market is off to a good start for Southwest Michigan.
In April, the region saw a 27 percent increase over March in the number of houses sold, while May had a 22 percent increase over April.
“The number of homes sold in May set a new record, but the year-to-date number of houses sold fell short by just four houses from the record 1,306 sold in 2017,” said Alan Jeffries, Association Executive, Southwestern Michigan Association of Realtors, Inc.
Comparing May 2019 to May 2018, the number of houses sold increased 10 percent. Going by year-to-date comparisons, the number of houses sold was up 6 percent.
“The average selling price in May 2019 increased 21 percent from April,” Jeffries. “In May 2018, the average selling price at $256,923, was 3 percent lower than the May 2019 average selling price. Year-to-date, the average selling price changed less than 1 percent.”
The median selling price increased by 12 percent to $182,000 in May 2019 from $163,000 in May 2018. Year-to-date, the median selling price at $165,000 was up 7 percent from May 2018.
The increased number of house sales raised the total dollar volume in May to a new record of $95.3 million and brought the total dollar volume up 13 percent over May 2018. Year-to-date, the total dollar volume was up 6 percent.
The inventory of houses for sale dropped 2 percent below that in May 2018. This was the first time in two years that the inventory didn’t drop by double digits when comparing year-to-year in May.
At 1,666 houses, the market had a 6.5-month supply of homes for sale. In May 2010, the market had a 16.4-month supply.
The number of bank-owned or foreclosed homes as a percentage of all transactions rose to 6 percent from 3 percent in April.
For the year, the percentage has been below double digits with the highest at 9 percent in January. The previous lowest percentage in May was also 6 percent in 2017. The highest percentage in May was 34 percent in 2009 and 2011.
Locally, the mortgage rate decreased to 4.25 from 4.32 percent in April. Last year in May, the rate was 4.75.
Nationally, the Freddie Mac mortgage rate in May dropped to 3.99 from 4.20 in April for a 30-year conventional mortgage.
Across the country
According to the National Association of Realtors, existing-home sales rebounded in May, recording an increase in sales for the first time in two months.
Each of the four major U.S. regions saw a growth in sales, with the Northeast experiencing the biggest surge last month.
Total existing-home sales jumped 2.5 percent from April to a seasonally adjusted annual rate of 5.34 million in May. Total sales, however, are down 1.1 percent from a year ago.
NAR chief economist Lawrence Yun said the 2.5 percent jump shows that consumers are eager to take advantage of the favorable conditions.
“The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,” Yun said.
The median existing-home price for all housing types in May was $277,700, up 4.8 percent from May 2018. May’s price increase marks the 87th straight month of year-over-year gains.
Regionally, existing-home sales in the Midwest jumped 3.4 percent to an annual rate of 1.22 million, which is 3.9 percent below May 2018 levels.
First-time buyers were responsible for 32 percent of sales in May, unchanged from the 32 percent the month prior and up from the 31 percent recorded in May 2018.
Nationally, the total housing inventory at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7 percent increase from 1.87 million a year ago.
Unsold inventory is at a 4.3-month supply at the current sales pace, up from the 4.2 months in May 2018. Although inventory is up, the months’ supply numbers remain near historic lows, which has a direct effect on pricing.
“Solid demand along with an inadequate inventory of affordable homes, have pushed the median home price to a new record high,” Yun said.
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