Existing-home sales experienced a significant boost in May, exceeding market forecasts with a 3.2% increase in the seasonally adjusted annual rate, reaching 4.16 million transactions. This surge also marked a new record median sales price for the month at $429,300, according to the National Association of REALTORS® (NAR).
Key Takeaways
- Existing-home sales climbed 3.2% month-over-month and year-over-year to 4.16 million units.
- The median sales price hit a new May record of $429,300.
- Sales of single-family homes saw a 3.5% monthly and 3.3% yearly increase.
- Inventory levels rose slightly, providing a 4.5-month supply.
Housing Market Momentum
NAR Chief Economist Lawrence Yun highlighted that the increase in home sales, reaching the highest level since December, is a positive sign for both the housing market and the broader economy. He attributed this momentum to improving affordability, noting that while mortgage rates have slightly increased from earlier in the year, they remain lower than the previous year and are close to the long-term historical average. Furthermore, income gains are marginally outpacing home price growth in many regions.
Regional Performance and Inventory
The month-over-month sales pace saw increases in the Northeast, Midwest, and South, while remaining flat in the West. Year-over-year, sales grew in the Midwest, South, and West, though they declined in the Northeast. Inventory levels saw a modest rise of 3.3% month-over-month and 0.6% year-over-year, reaching 1.55 million homes. This translates to a 4.5-month supply of unsold homes, consistent with April’s figures and down from 4.6 months a year ago.
Economic Impact of Increased Sales
Yun emphasized that the record-high May home price reflects strong underlying fundamentals and persistent supply constraints. He further noted that the uptick in home sales stimulates economic activity across various sectors, including home services, furniture purchases, moving companies, and mortgage origination.