Limited housing supply and strong buyer demand caused existing-home sales to drop for the fourth consecutive month, falling 0.9% in May, the National Association of REALTORS® reported Wednesday. Still, sales were up 44.6% year over year, according to NAR. The median price for an existing home reached $350,300.
“Home sales fell moderately in May and are now approaching pre-pandemic activity,” said NAR Chief Economist Lawrence Yun. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.” However, Yun added, the market’s outlook is encouraging. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”
Here’s a closer look at key housing indicators from NAR’s May existing-home sales report.
Days on market: Eighty-nine percent of homes sold were on the market for less than a month. Properties typically sold in 17 days, down from 26 a year earlier.
Home prices: The median existing-home price of $350,300 was up 23.6% from a year earlier ($283,500). Every major region of the U.S. posted price increases last month.
Housing inventory: At the end of May, total housing inventory reached 1.23 million units, up 7% from April’s inventory but down 20.6% from a year ago. Unsold inventory sits at a 2.5-month supply at the current sales pace.
First-time buyers: Comprised 31% of sales, down from 34% a year ago.
Individual investors and second-home buyers: Purchased 17% of homes, up from 14% a year earlier. These buying cohorts tend to comprise the largest share of cash sales, which accounted for 23% of overall transactions in. (Read more from a separate NAR report analyzing the uptick in the vacation-home market.)
Distressed sales: Foreclosures and short sales represented less than 1% of sales, down from 3% a year earlier. Federal pandemic-related foreclosure moratoriums are still in place until the end of the month.
The Midwest was the only major region of the U.S. that posted a month-over-month sales gain. Here’s a regional breakdown of May sales activity:
Northeast: Existing-home sales fell 1.4% in May, but the region’s annual rate of 720,000 is a 46.9% jump from a year ago. Median price: $384,300, up 17.1% annually.
Midwest: Existing-home sales increased 1.6% to an annual rate of 1.31 million, a 27.2% increase from a year ago. Median price: $268,500, an 18.1% annual increase.
South: Existing-home sales fell 0.4%, posting an annual rate of 2,590,000, but were up 47.2% from the same time one year ago. Median price: $299,400, a 22.6% jump annually.
West: Existing-home sales dropped 4.1% to an annual rate of 1.18 million, a 61.6% increase compared to a year earlier. Median price: $505,600, up 24.3% annually.