There was a slight improvement in the housing market in May, according to the National Association of Realtors (NAR), with existing-home sales increasing. While every region of the country posted year-over-year declines, month-over-month sales were variable, with the South and West seeing increases and the Northeast and Midwest seeing declines. According to Lawrence Yun, chief economist for the NAR, mortgage rates had an impact on the direction of home sales. “Relatively steady rates have led to several consecutive months of consistent home sales.”
Home Prices Climb in Some Markets
Just as sales were variable across the country, so too were home prices. The country-wide median existing-home price for all housing types dropped 3.1% year over year; however, prices climbed in the Northeast and Midwest and fell in the South and the West. The average property was available for 18 days in May, down from 22 days a month ago but up from 16 days in May 2022. Of all the homes sold, 74% were available for under 30 days.
A Demand for Housing Inventory
By the end of May, there were 1.08 million unsold units on the housing market, up 3.8% from a month earlier but down 6.1% from a year earlier. At the current sales pace, this level of inventory would supply the market for three months, up from a 2.9-month and a 2.6-month supply a month ago and a year ago, respectively. According to Yun, home sales were also impacted by the level of available inventory. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However,” he warned, “existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
First-time buyers accounted for 28% of all purchases in May; this is down from 29% in April but up from 27% a year earlier. According to the NAR “2022 Profile of Home Buyers and Sellers,” the annual share of first-time buyers was 26%, the lowest on record. All-cash sales represented 25% of all May transactions, unchanged year over year but down from 28% month over month. Individual investors and second-home buyers account for many all-cash sales, and these two groups represented 15% of the market in May, a drop from 17% in April and 16% in May 2022. Distressed sales, meanwhile, represented just 2% of all sales in May, unchanged from both a month and a year ago.
Regional Sales Breakdown
Northeast – Existing-home sales annual rate of 500,000; a decrease of 2% from April 2023 and 25.4% from May 2022. The median sales price of $439,000 represented a 2.5% increase from May 2022.
Midwest – Existing-home sales annual rate of 990,000; a decrease of 2.9% from April 2023 and 20.8% from May 2022. The median sales price of $298,000 represented a 1.1% increase from May 2022.
South – Existing-home sales annual rate of 2.02 million; an increase of 1.5% from April 2023 but a decrease of 16.5% from May 2022. The median sales price of $361,400 represented a 2.7% decrease from May 2022.
West – Existing-home sales annual rate of 790,000; an increase of 2.6% from April 2023 but a decrease of 25.5% from May 2022. The median sales price of $596,500 represented a 5.7% decrease from May 2022.