NAR: May Existing-Home Sales Fall, Median Price Sets Record

May sales fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million units. Total registered sales were down by 8.6% from 5.92 million a year ago.

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said Lawrence Yun, NAR’s chief economist. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”

The median existing-home price jumped 14.8% from May 2021 to $407,600. All regions posted increased pricing last month, marking the 123^rd straight month of year-over-year gains, and the longest-running streak on record.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” added 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.”

Total housing inventory at the end of May rose 12.6% from April to 1.16 million units but was down 4.1% from one year ago. Inventory is at a 2.6-month supply at the current sales pace. That’s up from 2.2 months in April and up 2.5 months YoY. Properties averaged 16 days on the market in May, that’s one day less than April’s total, and down from 17 days versus the same period a year ago.

NAR reports that 88% of homes sold in May were on the market for less than a month. First-time buyers accounted for 27% of sales last month, down from 28% in April and down from 31% in YoY.

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 the month prior. The average commitment rate across all of 2021 was 2.96%.

Regionally, existing-home sales in the Northeast climbed 1.5% in May to an annual rate of 680,000, falling 9.3% YoY from May 2021. The median price in the Northeast was $409,700, a 6.7% rise from one year ago.

In the Midwest, they were down 5.3% MoM to an annual rate of 1,240,000 in May, slumping 7.5% YoY. The median price in the Midwest was $294,500, up 9.5% from one year before.

In the South, sales declined 2.8% MoM to an annual rate of 2,410,000, down 8.4% YoY. The median price 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 versus the other three regions.

Existing-home sales in the West slid 5.3% MoM to an annual rate of 1,080,000 in May, down 10% YoY. The median price in the West was $633,800, an increase of 13.3% YoY.

By David Schollaert, David@SteelMarketUpdate.com