Existing-home sales slump again in May

Existing-home sales fell for a third straight month in May, according to the National Association of Realtors (NAR).

Total existing-home sales dropped 9.7% from April to a seasonally-adjusted annual rate of 3.91 million in May, the NAR reported today.

Year-over-year sales are down 26.6% from a year ago and a rate of 5.33 million in May 2019.

The latest existing-home sales report includes completed transactions of single-family homes, townhomes, condominiums, and co-ops.

Single-family home sales sat at a seasonally-adjusted annual rate of 3.57 million in May, down 9.4% from 3.94 million in April, and down 24.8% from one year ago.

The median existing single-family home price was $287,700 in May, up 2.4% from May 2019.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 340,000 units in May, down 12.8% from April and down 41.4% from a year ago.

The median existing condo price was $252,300 in May, a decrease of 1.6% from a year ago.

“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist. “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”

The median existing-home price for all housing types in May was $284,600, up 2.3% from May 2019 ($278,200), as prices increased in every region. May’s national price increase marks 99 straight months of year-over-year gains.

Total housing inventory at the end of May totaled 1.55 million units, up 6.2% from April, and down 18.8% from one year ago (1.91 million). Unsold inventory sits at a 4.8-month supply at the current sales pace, up from 4.0 months in April and up from the 4.3-month figure recorded in May 2019.

“New home construction needs to robustly ramp up in order to meet rising housing demand,” Yun said. “Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”

The latest data shows that Americans are leaving urban landscapes in favor of suburban and rural settings.

“Relatively better performance of single-family homes in relation to multifamily condominium properties clearly suggest migration from the city centers to the suburbs,” Yun said. “After witnessing several consecutive years of urban revival, the new trend looks to be in the suburbs as more companies allow greater flexibility to work from home.”

First-time buyers were responsible for 34% of sales in May, down from 36% in April 2020 and up from 32% in May 2019. 

Here’s how sales break down by region:

• In the Northeast, May 2020 existing-home sales fell 13%, recording an annual rate of 470,000, a 29.9% decrease from a year ago. The median price in the Northeast was $327,900, up 7.8% from May 2019.
• In the Midwest, existing-home sales decreased 10.0% in the Midwest to an annual rate of 990,000 in May, down 20.2% from a year ago. The median price in the Midwest was $227,400, a 3.0% increase from May 2019.
• In the South, existing-home sales in the South dropped 8.0% to an annual rate of 1.73 million in May, down 25.1% from the same time one year ago. The median price in the South was $247,400, a 2.1% increase from a year ago.
• In the West, existing-home sales fell 11.1% to an annual rate of 720,000 in May, a 35.1% decline from a year ago. The median price in the West was $408,400, down 0.2% from May 2019.