Existing-home sales dipped again in May as the median sales price hit a record high.
Existing sales fell by 0.7% last month to a seasonally adjusted annual rate of 4.11 million, according to the National Association of Realtors. They were down 2.8% YOY.
This was the worst May data since 2020 but in line with estimates from analysts surveyed by Bloomberg.
The median existing sales price rose 5.8% YOY to $419,300, the eleventh consecutive month of annual price gains and the highest price ever recorded by NAR.
At the same time, the inventory of unsold existing homes increased by 6.7% from the month prior to 1.28 million, the equivalent of 3.7 months’ supply at the current monthly sales pace. Annually, it jumped 18.5%.
“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” said NAR Chief Economist Lawrence Yun. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”
The data was driven entirely by the South, as sales in the West, Midwest, and Northeast remained the same.
Economists at Fannie Mae attribute the stock boost to homeowners who can’t or won’t delay moving any longer, as well as a “general upward recalibration in mortgage rate expectations” as we move further away from the ultra-low rates of the pandemic.
But while current homeowners have incentives to enter the market, first-timers may be the most impacted by the current environment.
“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” Yun said.
“The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning.”