Existing home sales declines even as median sales price reaches record high

Existing-home sales slightly declined in May as the median sales price climbed to a record high, according to the National Association of Realtors. In the four major U.S. regions, sales slid month-over-month in the South but were unchanged in the Northeast, Midwest and West. Year-over-year, sales rose in the Midwest but receded in the Northeast, South and West.

Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — retreated 0.7 percen from April to a seasonally adjusted annual rate of 4.11 million in May. Year-over-year, sales waned 2.8 percent (down from 4.23 million in May 2023).

“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” said NAR Chief Economist Lawrence Yun. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”

Total housing inventory registered at the end of May was 1.28 million units, up 6.7 percent from April and 18.5 percent from one year ago (1.08 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, up from 3.5 months in April and 3.1 months in May 2023.

The median existing-home price for all housing types in May was $419,300, the highest price ever recorded and an increase of 5.8 percent from one year ago ($396,500). All four U.S. regions registered price gains.

“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” Yun said. “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.”

According to the monthly Realtors Confidence Index, properties typically remained on the market for 24 days in May, down from 26 days in April but up from 18 days in May 2023.

First-time buyers were responsible for 31 percent of sales in May, down from 33 percent in April but up from 28 percent in May 2023. NAR’s 2023 Profile of Home Buyers and Sellers — released in November 2023 — found that the annual share of first-time buyers was 32 percent.

All-cash sales accounted for 28 percent of transactions in May, unchanged from April and up from 25 percent from one year ago.

Individual investors or second-home buyers, who make up many cash sales, purchased 16 percent of homes in May, identical to April and up from 15 percent in May 2023.

Distressed sales — foreclosures and short sales — represented 2 percent of sales in May, unchanged from April and the previous year.

In the West, existing-home sales in May were equivalent to April at an annual rate of 760,000, a drop of 1.3 percent from one year before. The median price in the West was $632,900, up 5.5 percent from May 2023.