May existing-home sales reverse course and move up for the first time in two months

Existing-home sales were mixed across the country in May as two of the four major regions showed improvements from April and the other two saw declines. Overall, existing-home sales were up 0.2% month-over-month, but were down 20.4% from a year ago, according to a report from the National Association of Realtors® (NAR).

"Mortgage rates heavily influence the direction of home sales," said NAR Chief Economist Lawrence Yun. "Relatively steady rates have led to several consecutive months of consistent home sales."

The South and West regions led the charge into positive territory.

• Northeast: Down 2.0%, an annual rate of 500,000, down 25.4% from May 2022
• Midwest: Down 2.9% to an annual rate of 990,000, down 20.8% from May 2022
• South: Up 1.5% to an annual rate of 2,020,000, down 16.5% from May 2022
• West: Up 2.6% with an annual rate of 790,000, down 25.5% from May 2022

Year-over-year numbers were down, but the decrease was the smallest in 8 months. These comparisons to 12 months prior will likely continue to be in the negative as we look back at what had been a much more robust housing market, with higher inventory and lower rates.

Inventory continues to (slowly) recover

Total housing inventory increased 3.8% from April, not as aggressive as the 7.8% increase seen last month, but still positive momentum. Inventory sat at 1.08 million units at the end of the month. This is a decrease from a year ago of 6.1% and represents a 3.0-month supply of homes at the current sales pace.

"Available inventory strongly impacts home sales, too," Yun notes. "Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019."

Month-over-month home prices went up in the Midwest and Northeast. Year-over-year, the national average home price went down by 3.1%. That continues a trend of year-over-year decreases, which is good news for homebuyers dealing with housing affordability issues, but also month-over-month increases, which is typical as we get into the spring and summer.

All-cash sales in May accounted for 25% of transactions in April, down from 28% in April. One benefit that all-cash offers give you is the ability to line up your timing with your seller’s needs. Talk to a loan officer about our Same Day Mortgage and how it can help you close as fast as cash.

Source: https://www.nar.realtor/newsroom/existing-home-sales-edged-higher-by-0-2-in-may