Fewer people purchased previously occupied homes in May, bringing sales down to their lowest level of the year.
Home sales sank 3.8% last month to a seasonally adjusted annual rate of 4.81 million homes, the weakest pace since November, the National Association of Realtors said Tuesday. Economists say that's far below the 6 million homes per year sold in healthy housing markets.
Since the housing boom went bust in 2006, sales have fallen in four of the past five years. They hit a 13-year low last year.
First-time homebuyers ticked down to 35% of sales. First-timers typically drive half of sales in healthy markets and they are critical because they typically improve their properties and invest in their communities, a combination that helps home values rise.
The median sales price for a previously occupied home in May was $166,500. That's 4.6% lower from the same month one year ago. The median price of a new home is nearly 31% higher than the median price for a re-sale, twice the normal markup.
The gap is largely because of the flood of foreclosures or short sales -- when the lender accepts less than what is owed on the mortgage. Those sales are forcing down prices.
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