Existing home sales increased marginally in May but were still significantly lower than a year earlier, according to the latest report. National Association of Realtors (NAR).
Thank you for reading this post, don't forget to subscribe!Total existing home sales rose 0.2% from April to a seasonally adjusted annual rate of 4.30 million in May. Year-on-year, sales fell 20.4% to 5.40 million in May 2022.
Home sales have been falling on an annual basis since federal Reserve The benchmark rate hikes started in the spring of 2022. Mortgage rates have hovered in the 6% to 7% range over the past three months, which has led to several months of steady, if ineffective, home sales.
Total housing inventory recorded at the end of May stood at 1.08 million units, up 3.8% from April, but down 6.1% from May 2022 (1.15 million). The trade group said unsold inventory is at 3.0 months of supply at the current sales pace, up from 2.9 months in April and 2.6 months in May 2022.
“Available inventory strongly influences home sales,” said Lawrence Yun, chief economist at NAR. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times due to the abundant inventory in the area. However, the current domestic sales activity is quite low as the current supply is almost half of the 2019 level.
Although all four regions experienced year-over-year sales declines, the South and West posted month-over-month improvements, while sales in the Northeast and Midwest declined from April. Prices rose in the Northeast and Midwest but fell in the South and West.
Sales in the South rose 1.5% from April to an annual rate of 2 million; The median price in the South decreased 2.7% from May 2022 to $361,000.
In the West, where affordability challenges and a tech slowdown have softened the market, existing home sales rose 2.6% from April to an annual rate of 790,000, an overall decline of 25.5% from a year earlier. Prices in the west came in at $596,500, down 5.7% from May 2022.
Meanwhile, existing home sales in the Northeast declined 2.0% from April to an annualized 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 a year ago.
In the Midwest, existing home sales fell 2.9% from April to an annual rate of 990,000, down 20.8% from the previous year. The median price in the Midwest was $298,000, up 1.1% from May 2022.
The median existing home price in May for all housing types – including single-family homes, condos and townhouses – was $396,100, a 3.1% decline from May 2022 ($408,600). The price of an existing single-family home was $401,100 in May, down 3.4% from a year earlier.
“Despite reports of a fall in prices in May, we can see a bottom and prices should stabilize or rise in most parts of the country in the second half of the year,” said Lisa Sturvetant, chief economist. bright mls, “The pace of existing home sales will remain slow through the rest of the year, and it is likely that we will see total annual home sales decrease by more than 10% compared to last year’s levels. Lower mortgage rates and an increase in supply could inspire a busy market in 2024.”
Properties typically stayed on the market for 18 days in May, down from 22 days in April, but up from 16 days in May 2022. Nearly three-quarters of homes sold in May had been on the market for less than a month. First-time buyers accounted for 28% of sales in May, down from 29% in April, but up from 27% in May 2022.
All-cash sales accounted for a quarter of transactions in May, down 28% from April and about the same as a year ago. Individual investors or second home buyers who make multiple cash sales bought 15% of homes in May, down from 17% in April and 16% last year.
To the housing bears’ continued dismay, distressed sales represented only 2% of sales in May, virtually unchanged from the previous month and the prior year.
Although the current home sales market is performing poorly, homebuilders are coping with the lack of competition and injecting supply into the market. New home sales now account for about one-third of transactions, and housing starts in May had one of the highest readings in history.
“This slow flow of new existing home listings coming to market is suppressing sales from levels seen a year ago because there are far fewer homes available to transact, but this spring season the market is returning to its normal rhythm. and sales are up from a year ago,” said Nicole Bachaud, a senior economist at Zillow, “Low inventory will continue to hold this market and will depress existing home sales numbers, thereby putting pressure on prices and affordability. But thankfully, the new construction market is churning out a steady flow of new homes to help fill the gap.
