by Calculated Risk on 6/26/2008 11:00:00 AM

Note: for the 2nd month in a row, the NAR didn't release the Existing Home sales data online in a timely manner.

The NAR reports: May Existing-Home Sales Show Modest Gain

Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 2.0 percent to a seasonally adjusted annual rate 1 of 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the 5.93 million-unit pace in May 2007.

Click on graph for larger image in new window.

The first graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in May 2008 (4.99 million SAAR) were the weakest May since 1998 (4.77 million SAAR).

It's important to note that a large percentage of these sales are for homes that were foreclosed during the previous year. Dataquick reported that in California in May, 38.3 percent of all sales were foreclosure resales!

The second graph shows nationwide inventory for existing homes. According to NAR, inventory decreased to 4.49 million homes for sale in May.

Total housing inventory at the end of May fell 1.4 percent to 4.49 million existing homes available for sale, which represents a 10.8-month supply at the current sales pace, down from a 11.2-month supply in April.

The typical pattern is for inventory to decline in December, and then to slowly rebound in January and February, and really start to increase from March through mid-Summer.

The third graph shows the 'months of supply' metric for the last six years.

Months of supply decreased to 10.8 months.

This follows the highest year end months of supply since 1982 (the all time record of 11.5 months of supply). Even if inventory levels stabilize, the months of supply could continue to rise - and possibly rise significantly - if sales decline later this year. More later when the raw data is available ...