Sales in total decline for the fourth straight month
Existing-home sales, weighed down by rising prices and low inventory, fell for the fourth consecutive month in May.
According to the National Association of Realtors, total existing-home sales were down 0.9% to an annual pace of 5.80 million – the slowest month-over-month rate since June 2020. Year over year, sales were up 44.6% to an annualized rate of 4.01 million.
“Home sales fell moderately in May and are now approaching pre-pandemic activity,” NAR chief economist Lawrence Yun said. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”
Despite these headwinds, housing demand remains very strong, and sales last month were still much higher than in May 2019, said Joel Kan, AVP of economic and industry forecasting at the Mortgage Bankers Association.
“The median sales price once again surged to a record high at $350,300. For context, the median price was around $295,000 in 2020 and just under $270,000 in 2019,” he said.
Kan also highlighted the positive market outlook on supply.
“One positive development was the 7% increase in for-sale inventory, which should slightly help price conditions. However, the stagnating first-time buyer share at 31%, along with the rapidly increasing median sales price, are signs that affordability is an ongoing challenge at the lower end of the market,” Kan said.
Total housing inventory amounted to 1.23 million units at the end of May. Unsold inventory sits at a 2.5-month supply, slightly up from April’s 2.4% supply but down from 4.6-months a year ago.