Existing home sales dropped -3.4% m/m and -8.6% y/y during May.
Existing Home Sales on Downward Trajectory
According to the National Association of REALTORS® (NAR), existing home sales fell for the fourth consecutive month to an annual rate of 5.41M. This seasonally-adjusted annual rate of declining existing home sales in May represented a drop of -3.4% m/m and -8.6% y/y.
(NAR’s definition of existing-homes includes single-family homes, townhomes, condominiums and co-ops.)
The good news for homebuyers? The supply of unsold for-sale homes increased +1.16M homes in May, the equivalent of 2.6 months of inventory at the current monthly sales pace.
The bad news for homebuyers? The median existing-home sales price jumped to $407,600 in May, the first time the median existing-home sales price topped $400,000. This $407,600 price tag represents a a median sales price increase of +14.8% y/y.
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Lawrence Yun, Chief Economist with NAR, said, “Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance. 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.”
Sales Declines Anticipated in Coming Months
Yun added, “Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year. 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.”
Key Data Points on May’s Housing Market Activity
- Across all regions in the country, the median existing-home price for all housing types was $407,600, an increase of +14.8% y/y from the median existing-home price of $355,000 in May 2021.
- May 2022 represented the 123rd consecutive month of year-over-year existing-home price increases.
- DOM = 16 days in May. 88% of homes sold in May remained on the market for less than one month.
- First-time buyers represented 27% of all sales in May.
- All-cash buyers accounted for 25% of sales transactions in May.
- Individual investors or second-home buyers accounted for 16% of sales transactions in May.
- Distressed sales – foreclosures and short sales – represented less than 1% of sales transactions in May.
Regional Breakdown of Existing-Home Sales in May
- Northeast – sales up +1.5% m/m, down -9,3% y/y – median price of $409,700, +6.7% y/y
- Midwest – sales down -5.3% m/m and -7.5% y/y – median price of $294,500, +9.5% y/y
- South – sales down -2.8% m/m, -8.4% y/y – median price of $375,000, +20.6% jump y/y (highest pace of price appreciation comparatively with other three regions)
- West – sales down -5.3% m/m, -10.0% y/y – median price of $633,800, +13.3% y/y
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Thanks to the National Association of REALTORS®.
