The 20.6% monthly and 4.3% yearly rise reported by RE/MAX’s National Housing Report resulted from over two thirds of metros experiencing increased transaction volume.
Prices also gained with the median sales price of $232,500 the second highest on record behind the $236,062 seen in August 2008.
"In May, we saw an uptick of both loan applications and home sales, which is encouraging in terms of more people getting into the market for homes," said Adam Contos, RE/MAX Co-CEO. "We don't expect that the Federal Reserve's announcement to raise interest rates a quarter of a point will greatly affect the market's momentum. But housing demand only intensifies the tug-of-war with tight inventories driving prices up."
The strongest gains in sales year-over-year were in Albuquerque, up 20.8%; Tulsa, up 13.4%; and Las Vegas, up 12.2%.
Median prices gained 3.6% year-over-year across the 53 surveyed metros but were strongest in 6 areas which recorded double-digit increases - Manchester, NH +13.2%, Seattle, WA +12.8%, Tampa, FL +12.8%, Las Vegas, NV +10.7% and Dallas/Fort Worth +10.7%.
Only one metro saw a decrease in median price over the year; Fargo, ND was down 2.7% from May 2016.
Nationally, inventory was down 0.6% from April and down 16.2% from May 2016 with just 2.6 months of supply at current sales pace, well below the 6 months required for a balanced market.
The exception was Miami which had 6.1 months of supply in May, which San Francisco and Seattle had the lowest supply at just 0.9 months.
More market update:
Home sales rebounded sharply in May to return to seasonal highs following a dip in April.