Existing-Home Sales Drop 2.2% in May

New data from the National Association of Realtors shows that sales of existing homes fell by an unexpected 2.2% in May.

The seasonally adjusted annual rate fell to 5.66 million units in May, down from an upwardly revised surge of 5.79 million units in April.

Lawrence Yun, NAR chief economist, said he expects one more month of elevated home sales. "We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings."

He also warned that "approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales."

Meanwhile, the national median existing-home price hit $179,600 in May, up 2.7 % from a year ago. Distressed homes slipped to 31% of sales last month, compared with 33% in April. Distressed home sales were also 33% of the total in May 2009.