The rise in prices was likely precipitated by rising home sales which as of May are at the highest level experienced since the homebuyer tax credit expired in 2010. During May 2012, existing home sales rose month over month to 112,000, coming close to September 2010's 118,000 home sales which came at the end of the tax credit period. Home sales were pushed up in 2010 as the tax credits wound down. Many months of declining sales followed the end of the tax credits, and May's increase signals a rise to some of the largest amounts of home sales activity we've seen in two years.
The first graph shows median home prices for all regions plus the U.S. The median home price in the west had been generally flat during 2011. Buit prices in the west have accelerated upward during the past two months, rising to $233,900 during May 2012.
Nationally, home prices rose 7.9 percent, year over year.
Home sales transactions (closings) rose 7.7 percent in the West region, which was the smallest increase in home sales closings of any region, year-over-year. Home sales rose 21 percent in the Midwest from May 2010 to May 2011, and closings rose by 11 percent nationally during the same period.
The second graph shows closings by region. In general, closings increased each month from January 2012 to May 2011, following seasonal patterns. All regions showed a month-over-month increases, and all regions showed increases in the year-over-year comparisons for May.
The NAR data tends to be one of the more optimistic among the various reports on home prices and home sales activity, reporting larger increases than what we've seen regionally or locally. See here for more.
According to NAR, home closings were hampered by a lack of inventory. According to the NAR press release:
There are broad-based shortages of inventory in the lower price ranges in much of the country except the Northeast, and in the West supply is extremely tight in all price ranges except for the upper end. "Realtors® in Western states have been calling for an expedited process to get additional foreclosed properties onto the market because they have more buyers than available property," Yun added. Widespread inventory shortages also are found in much of Florida.