More housing inventory will eventually tame home price growth in the upcoming months, says NAR’s chief economist. Read more from NAR’s latest housing report.
Existing-home sales prices climbed to a record high in May, as home buyers—also up against mortgage rates that were then above 7%—must continue digging deeper into their pockets.
The median existing-home sales price rose nearly 6% in May compared to a year ago, reaching $419,300, the highest price ever recorded, the National Association of REALTORS® reported on Friday. The Northeast saw the largest uptick in home prices, up 9.2% compared to a year ago.
Meanwhile, as home prices rose, existing-home sales—completed transactions that include single-family homes, townhomes, condos and co-ops—fell slightly by 0.7% last month compared to April. Home sales are down 2.8% compared to a year ago, NAR’s latest home sales report shows.
“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” says NAR’s Chief Economist Lawrence Yun. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”
Home buyers are finding more choices: Total housing inventory at the end of May was at 1.28 million, up 6.7% compared to the previous month and up 18.5% compared to a year ago.
But high home prices continue to press buyers against rising affordability woes. “Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” Yun says. “The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning.”
They’re still buying, despite the challenges. First-time buyers comprised 31% of sales in May, up from 28% a year ago, NAR’s report shows.
First-time buyers and other purchasers are facing increased competition from a growing share of all-cash buyers in the market. All-cash sales accounted for 28% of transactions in May, up from 25% a year earlier. Investors and second-home buyers tend to make up the largest share of cash sales, comprising 16% of the sales market last month, NAR reports.
Buyers continue to have to make purchase decisions quickly, as existing homes are selling at a rapid pace. Properties typically remained on the market for 24 days in May.
Regional Breakdown
Here’s how existing-home sales fared in May across the country:
- Northeast: Sales held steady last month, remaining at an annual rate of 480,000. Sales are down 4% compared to a year ago. Median price: $479,200, up 9.2% from a year ago.
- Midwest: Sales also held steady in May compared to April, at an annual rate of 1 million, but are up 1% from a year earlier. Median price: $317,100, up 6.4% from May 2023.
- South: Sales declined 1.6% from April, settling at an annual rate of 1.87 million. Sales are down 5.1% from the previous year. Median price: $374,300, up 3.6% from a year ago.
- West: Existing-home sales held steady in May, staying at an annual rate of 760,000. Sales are down 1.3% compared to a year earlier. Median price: $632,900, up 5.5% from May 2023.
Source: nar.realtor
