May existing-home sales see slight increase
Existing-home sales saw a slight increase in May, the National Association of Realtors (NAR) reported this morning.
Total existing-home sales edged upward by 0.2% from April to a seasonally adjusted rate of 4.3 million. Year-over-year, sales plummeted by 20.4% and a rate o 5.4 million in May 2022.
As defined by the NAR, existing-home sales include completed transactions of single-family homes, townhomes, condos, and co-ops.
Single-family home sales slipped 0.3% to a seasonally adjusted annual rate of 3.85 million in May compared to 3..86 million in April. Compared to a year ago, existing single-family home sales decreased by 20%.
“Mortgage rates heavily influence the direction of home sales,” said NAR Chief Economist Lawrence Yun. “Relatively steady rates have led to several consecutive months of consistent home sales.”
Housing supply has been a catalyst behind the direction of existing-home sales and new home sales. Limited existing inventory has pushed potential home buyers toward the purchase of new homes.
Total housing inventory registered at the end of May was 1.08 million units, up 3.8% from April but down 6.1% from one year ago (1.15 million).
Unsold inventory sits at a 3-month supply at the current sales pace, up from 2.9 months in April and 2.6 months in May 2022.
“Available inventory strongly impacts home sales, too,” Yun added. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
The latest Monthly New Residential Construction report, released on June 20, showed housing starts shooting ahead by 21.7% last month as single-family starts surged by 18.5%. Residential construction on the horizon also had a solid showing with total permits climbing 5.2% while single-family permits increased 4.8% above the prior month.
Housing affordability continues to be a specter looming over the housing industry. The State of the Nation’s Housing 2023 report, released yesterday by the Harvard Joint Center for Housing Studies (JCHS), indicates that rising rent costs, interest rates, and mortgage rates are making it impossible for millions of Americans to purchase a home.
Since the beginning of 2020, asking rents in the professionally managed sector are up by 24% while home prices are up by 37.5 percent%, according to the report.
The NAR reports that the median existing-home price for all housing types in May was $396,100, a decline of 3.1% from May 2022 ($408,600) and a 20% year-over-year decline. Prices grew in the Northeast and Midwest, however.
The median existing single-family home price was $401,100 in May, down 3.4% from May 2022.
Here’s how existing-home sales break down on a regional basis:
- Existing-home sales in the Northeast declined 2% from April to an annual rate of 500,000 in May, down 25.4% from May 2022. The median price in the Northeast was $439,000, up 2.5% from one year ago.
- In the Midwest, existing-home sales faded 2.9% from one month ago to an annual rate of 990,000 in May, decreasing 20.8% from the previous year. The median price in the Midwest was $298,000, up 1.1% from May 2022.
- Existing-home sales in the South expanded 1.5% from April to an annual rate of 2.02 million in May, sliding 16.5% from the prior year. The median price in the South was $361,400, down 2.7% from May 2022.
- In the West, existing-home sales rose 2.6% from the previous month to an annual rate of 790,000 in May, down 25.5% from one year ago. The median price in the West was $596,500, down 5.7% from May 2022.
