A report released this morning by the National Association of Realtors showed that total existing home sales in America, which account for a much larger portion of the overall U.S. housing market than new home sales (due out next week), fell by 2.5 percent in May to a seasonally adjusted annual rate of 5.430 million units. That was the second monthly decline in a row, worse than expected, and the April figure was revised lower. Most of the weakness occurred in the single-family housing segment, although sales in the upper-end of the market remained solid. Regionally, existing home sales increased in the Northeast (+4.6 percent) last month and fell in the South (-0.4 percent), the West (-0.8 percent), and the Midwest (-2.3 percent).
Total housing inventory rose 2.8 percent in May to 1.85 million existing homes available for sale, although that is still 6.1 percent lower compared to a year earlier. Despite the slight uptick in supply, the median selling price increased to $264,800 last month, a new all-time high. Young, first-time homebuyers with insufficient cash are being hurt the most by affordability constraints, and Lawrence Yun, NAR’s chief economist, added that “there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.” On the other hand, any flippers that survived the bursting of the housing bubble are likely enjoying the current environment where “listings are going under contract in less than a month – and much faster – in many parts of the country,” according to the report.
Sources: Econoday, NAR, FRBSLPost author: Charles Couch