Two recent data points – existing home sales and mortgage debt outstanding – point to continued strength in the housing recovery.
May total existing home sales, including single family homes, town houses and condominiums, were 5.35 million, up 5.1% and the highest figure since November 2009. Sales of single family homes were 4.73 million, 5.6% higher than April and 9.7% above a year earlier. Inventories crept up slight and months supply was 5.1. While existing homes continue recent gains, sales of new homes picked up in April. Together these figures point to further gains in the summer months. New Home sales for May will be reported on tomorrow, June 23rd. The first chart shows sales of existing single family homes.
Prices have also been advancing. The S&P/Case-Shiller National Home Price index was up 4.1% in the 12 months to March, extending a pattern of gains 35 consecutive months. Median sales prices reported by the National Association of Realtors show gains as well.
Growth in mortgage debt outstanding has been on a long roller coaster ride, peaking in 2003 and then beginning a long slide into negative territory in 2006. In the last two quarters, growth has barley turned positive. The peak level of outstanding mortgage debt was $10.69 trillion in the first quarter of 2008; the low point since then was $9.37 trillion in last year’s second quarter. Neither mortgage debt nor national home prices are about to surpass the bubble peaks, but they are headed in the right direction. The second chart shows year-over-year growth in residential mortgages.