May Home Sales Keep Up Pace in Southeast

A monthly poll of brokers and builders shows sales in the Southeast rising once again in May.

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According to a survey conducted by the ""Federal Reserve Bank of Atlanta"":http://www.frbatlanta.org/, a huge majority of brokers in the region observed an increase in sales in May, with 40 percent saying numbers were up ""slightly"" over last year and another 44 percent saying sales were up ""significantly."" May was the third straight month in which the share of brokers reporting significant year-over-year sales gains increased.

Builders also indicated sales were stronger than last year, with 38 percent reporting slight increases and 33 [COLUMN_BREAK]

percent reporting significant improvements. However, builders noted that sales growth had slowed from April, when nearly half of respondents reported significant yearly gains.

""Once again, shortages of home inventory were a theme that repeated among May's reports. Brokers in particular complained that the lack of inventory was restraining home sales, while builders remained frustrated at their inability to secure construction financing, which they felt was holding back the new home market as well,"" said Whitney Mancuso, a senior economic analyst for the Atlanta Fed's research department.

The shortage of for-sale homes also had respondents reporting continued upward pressure on home prices. At the same time, most builders indicated increases in labor and material costs, with labor costs rising between 1 percent 4 percent over May 2012.

On the positive side, brokers and builders were both upbeat in their outlooks for sales in the coming months. Eighty-three percent of brokers said they expect sales to rise in the next three months (60 percent answering ""slightly"" and 20 percent answering ""significantly""). The builder outlook was a bit more tempered, with 63 percent anticipating slight sales improvements and none expecting significant growth.