Existing home sales during May recorded a scant 0.2% uptick from the previous month and a significant 20.4% year-over-year decline, according to data from the National Association of Realtors (NAR).
A total of 4.30 million completed took place last month – one year earlier, the total was 5.40 million. The median existing-home price for all housing types in May was $396,100, a 3.1% drop from the $408,6000 price set in May 2022.
“Mortgage rates heavily influence the direction of home sales,” said NAR Chief Economist Lawrence Yun. “Relatively steady rates have led to several consecutive months of consistent home sales.”
First-time buyers were responsible for 28% of sales in May, down from 29% in April but up from 27% in May 2022. All-cash sales accounted for 25% of transactions in May, down from 28% in April and identical to one year ago. And distressed sales represented 2% of all transactions in May, virtually unchanged from last month and the prior year.
Total housing inventory at the end of May was 1.08 million units, up 3.8% from April but down 6.1% from one year ago (1.15 million). Unsold inventory was at a 3-month supply at the current sales pace, up from 2.9 months in April and 2.6 months in May 2022.
“Available inventory strongly impacts home sales, too,” Yun stated. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
“A temporary capital gains tax reduction on a sale of investment property can lead to a boost in housing inventory, home sales and the economy,” added NAR President Kenny Parcell, a realtor from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “Policymakers need to seriously consider the measure.”
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