Home Sales Fall, Inventories Jump

Existing-home sales remained in a funk in May, as housing inventories remained at the highest level since 1992 and prices fell 2% from a year earlier.

Sales reached an annual rate of 5.99 million units in the month, down from the upwardly revised rate of 6.01 million in April, the National Association of Realtors said. On a year-over-year basis, sales slid 10.3%.

Economists expected a rate of 6 million sales, according to estimates from Reuters.

Total housing inventory rose to 4.43 million existing homes available for sale, which represents 8.9 months of supply at the current sales pace. This was up from 8.4 months of supply in April and 6.4 months in May 2006.

The May tally was the highest months supply of inventory since June 1992, when the Realtor group reported 8.9 months of supply. The highest-ever supply level was 9.1 months in November 1991, when the U.S. was in a recession.

The buildup of houses across the country continues to hurt pricing. The national median existing home price was $223,700 in May, down from $228,500 a year earlier.

The news was the first of several pieces of data this week on the housing market. On Tuesday, the Census Bureau reports sales of new homes in May, and homebuilder Lennar(LEN) reports earnings before the market opens.

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