Existing home sales sluggish but gained in May

(The Center Square) – Sales of existing-homes in the U.S. rose 0.8% in May from the prior month, the National Association of Realtors said Monday.

Sales grew in the Northeast, Midwest and South, but retreated in the West. Year-over-year, sales progressed in the Northeast and Midwest but contracted in the South and West.

"The relatively subdued sales are largely due to persistently high mortgage rates. Lower interest rates will attract more buyers and sellers to the housing market," NAR Chief Economist Lawrence Yun said. "Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs."

William Pulte, director of the U.S. Federal Housing Finance Agency, blamed Federal Reserve Chairman Jerome Powell for high interest rates, similar to criticism Powell has faced from U.S. President Donald Trump, who has been pushing Powell for months to lower rates.

"Jerome Powell is a main reason for the Housing Supply Crisis in this Country," Pulte wrote on X. "By improperly keeping interest rates high, Jerome Powell is trapping homeowners in low-rate mortgages and choking off existing home sales – directly fueling the housing supply crisis. He must lower rates."

Month-over-month existing home sales climbed to seasonally adjusted annual rate of 4.03 million in May. Unsold inventory increased 6.2% to 1.54 million units, equal to 4.6 months' supply. A sixth-month supply is generally considered a balanced market. Year-over-year, existing home sales slipped 0.7% and median existing-home prices increased 1.3% to $422,800. That's a record high for the month of May, and the 23rd consecutive month of year-over-year price gains.

Single-family homes sales climbed 1.1% in May to a seasonally adjusted annual rate of 3.67 million, up 0.3% from May 2024. Single-family home prices were up 1.3% to a median of $427,800. Sales fell for condominiums and co-ops in May, declining 2.7% in sales to a seasonally adjusted annual rate of 360,000 units, down 10% from May 2024. The median price for condominiums and co-ops was $371,300, up 0.7% from May 2024.

In the Northeast, existing homes sales gained 4.2% month-over month to an annual rate of 500,000, up 4.2% year-over-year, with a $513,300 median price that was up 7.1% from May 2024. In the Midwest, existing home sales increased 2.1% month-over month to an annual rate of 990,000, up 1% year-over-year, with a median price of $326,400, up 3.4% from May 2024. In the South, existing home sales increased 1.7% month-over month to an annual rate of 1.84 million, down 0.5% year-over-year, with the media price at $367,800, down 0.7% from May 2024. In the West, sales slid and prices increased. That region reported a 5.4% decrease in sales month-over month to an annual rate of 700,000, down 6.7% year-over-year with a median price of $633,500, up 0.5% from May 2024, according to NAR.

The median time on market for properties in May was 27 days, down from 29 days in April and up from 24 days in May 2024. About 30% of sales were first-time home buyers, down from 34% in April and 31% in May 2024. And 27% of transactions were cash sales, up from 25% in April, down from 28% in May 2024. Seventeen percent of transactions were individual investors or second-home buyers, up from 15% in April and 16% in May 2024.

The average 30-year fixed-rate mortgage was 6.81% as of June 18 according to Freddie Mac, down from 6.84% one week before and 6.87% one year ago.