Sales of existing homes fell 0.7% in May to a 4.1-million-unit annualized pace, per the National Association of REALTORS® (NAR), compared to the 1.4% decline the market was expecting. This report measures closings on existing homes in May and likely reflects people shopping for homes in March and April. The median home price reached a record high of $419,300, which was up 3% month-over-month and 5.8% year-over-year.
What’s the bottom line? While the pace of sales declined again in May, the speed at which homes sold continued to accelerate. Homes remained on the market for a shorter period in May, with the 24-day average down from 26 days in April. Plus, 30% of homes sold above list price, which rose from 27% in April. These factors both signal that demand and competition remain during this spring buying season, even in the face of elevated rates.
Inventory also saw a boost, as the 1.28 million homes available for sale at the end of May were up 6.7% from April and 18.5% from a year earlier. While this remains below healthy levels at just a 3.7 months’ supply at the current sales pace, rising inventory is certainly a step in the right direction to help improve ongoing supply constraints.