According to the National Association of Realtors there was a drop in existing home sales during the month of May. The rate of sales of previously owned homes fell 2.2 percent during the month. This comes as a surprise to many analysts who had expected the rate to increase five percent.
During the month of May there were 5.66 million sales, which include townhomes, single-family homes, co-ops and condominiums. This follows a surge in existing home sales during the month of April.
There are several different aspects that are being cited as possible reasons for the decline, including that those who received the $8,000 tax credit had to have had their contracts signed by the end of April. Additionally, the high number of people who are unemployed throughout the country continues to be a factor, as fewer people have the financial means to purchase a home or qualify for a mortgage.
Other factors at play in the decline of existing home sales is that new homebuilders are offering deeply discounted rates and incentives to purchase new, and for many people, they are holding off on making a home purchase because of the uncertain economic times.
Despite the decline in home sales for the month, sales were still 19.2 percent above the same period in 2009. The May 2010 median home price for existing purchases was $179,600, which is up 2.7 percent from May 2009.
In addition to the many reasons that buyers may be holding back on making purchases at this time, there are also delays that cannot be avoided. For example, with it being hurricane season, some home buyers in the state of Florida will experience set backs in getting their flood insurance coverage, which will delay home purchase closings.