Existing-home sales fall again

Existing-home sales receded for the fourth straight month in May, the National Association of Realtors (NAR) reported this morning.

Total existing-home sales, which include completed transactions of single-family homes, townhomes, condominiums, and co-ops, fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. 

Year-over-year, sales declined 8.6% compared to 5.92 million in May 2021.

Single-family home sales declined to a seasonally adjusted annual rate of 4.80 million in May, falling 3.6% from 4.98 million in April and down 7.7% from one year ago. 

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun. “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.”

Total housing inventory^[ii] registered 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 (1.21 million). 

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.

Housing affordability is a big part of the picture when it comes to the decline in sales.

The NAR reported that the median existing-home price for all housing types in May was $407,600, up 14.8% from May 2021 and a price of $355,000. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record.

The median existing single-family home price reached $414,200 in May, up 14.6% from May 2021.

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

First-time buyers were responsible for 27% of sales in May, down from 28% in April and down from 31% in May 2021. 

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in May, down 1.6% from April and down 15.3% from one year ago.

The median existing condo price was $355,700 in May, an annual increase of 14.8%.

Here’s how existing-home sales break down by region:

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

Existing-home sales in the Midwest dropped 5.3% from the previous month to an annual rate of 1,240,000 in May, slumping 7.5% from May 2021. The median price in the Midwest was $294,500, up 9.5% from one year before.

Existing-home sales in the South declined 2.8% in May to an annual rate of 2,410,000, 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 to the other three regions.

Existing-home sales in the West slid 5.3% compared to the month before to an annual rate of 1,080,000 in May, down 10.0% from this time last year. The median price in the West was $633,800, an increase of 13.3% from May 2021.