Existing home sales retreated for the fourth consecutive month in May to a seasonally adjusted annual rate of 5.41 million, according to the National Association of Realtors (NAR).
Total existing home sales, which include single-family homes, townhomes, condominiums, and co-ops, fell 3.4% from April and 8.6% on a year-over-year basis.
“Home sales have essentially returned to the levels seen in 2019—prior to the pandemic—after two years of gangbuster performance,” says NAR chief economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference toward suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”
Total housing inventory at the end of May was 1,160,000 units, an increase of 12.6% from April and a 4.1% decline from the previous year. Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.
The median existing home price for all housing types in May was $407,600, up 14.8% from May 2021, as prices increased in all regions. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record, according to the NAR.
“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” adds Yun. “Nonetheless, homes priced appropriately are selling quickly, and inventory levels still need to rise substantially—almost doubling—to cool home price appreciation and provide more options for home buyers.”
The NAR reports properties typically remained on the market for 16 days last month, down from 17 days in April and 17 days in May 2021. Eighty-eight percent of homes sold in May were on the market for less than a month.
First-time buyers were responsible for 27% of sales in May, down from 28% in April and down from 31% in May 2021. All-cash sales accounted for 25% of transactions last month, while individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in May.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate across 2021 was 2.96%.
Single-family home sales declined to a seasonally adjusted annual rate of 4.8 million in May, down 3.6% from 4.98 million in April and down 7.7% from one year ago. The median existing single-family home price was $414,200 in May, up 14.6% on a year-over-year basis.
Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions.
Existing home sales in the Northeast climbed 1.5% in May, falling 9.3% from May 2021. The median price in the Northeast was $409,700, a 6.7% rise from one year ago.
In the Midwest, existing home sales dropped 5.3% from the previous month, slumping 7.5% from May 2021. The median price in the Midwest was $294,500, up 9.5% from one year before.
The West slid 5.3% compared with the month before, down 10% from this time last year. The median price in the West was $633,800, an increase of 13.3% from May 2021.
Existing home sales in the South declined 2.8% in May, down 8.4% from the previous year. The median price in the South was $375,000, a 20.6% jump from one year ago. For the ninth consecutive month, the South recorded the highest pace of price appreciation in comparison with the other three regions.
