Home prices hit record high in May as sales stall

Sales
of
previously
owned
homes
are
sitting
at
a
30-year
low
and
didn’t
move
much
in
May
as
prices
hit
a
new
record
and
mortgage
rates
remain
high.

So-called
existing
home
sales
in
May
were
essentially
flat,
down
0.7%
from
April
to
a
seasonally
adjusted,
annualized
rate
of
4.11
million
units,
according
to
the
National
Association
of
Realtors,
or
NAR.
Sales
fell
2.8%
from
May
of
last
year.

This
count
of
closed
sales
is
based
on
contracts
likely
signed
in
March
and
April.
The
sluggish
sales
pace
came
as
rates
took
a
big
leap
in
April.

The
average
rate
on
the
popular
30-year
fixed
loan
started
the
month
just
below
7%
and
then
rose
to
just
over
7.5%
by
mid-April,
before
settling
back
slightly
in
May,
according
to
Mortgage
News
Daily.
That
rate
is
now
right
around
7%.

“Home
sales
refuse
to
recover,”
said
Lawrence
Yun,
chief
economist
at
the
NAR.
“I
thought
we
would
see
a
recovery
this
spring.
We
are
not
seeing
it.”

Sales
were
unchanged
month
to
month
in
all
regions
except
the
South,
where
they
fell
1.6%.

The
biggest
change
in
May
is
that
the
inventory
of
homes
for
sale
jumped,
up
6.7%
month
to
month
and
18.5%
higher
than
in
May
last
year.
At
the
current
sales
pace,
there
is
now
a
3.7-month
supply.
While
inventory
is
gaining,
it
is
still
very
low
given
demographics
and
demand.

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

That
demand
continues
to
push
prices
higher.
The
median
price
of
an
existing
home
sold
in
May
was
$419,300,
a
record-high
price
in
the
Realtors’
recording
and
up
5.8%
year
over
year.
The
gain
was
the
strongest
since
October
2022.
Prices
gained
in
all
regions.

The
Realtors
noted
in
a
release
that
the
mortgage
payment
for
a
typical
home
today
is
more
than
double
what
it
was
five
years
ago.
Not
only
have
rates
climbed,
but
home
prices
are
more
than
50%
higher
than
they
were
five
years
ago.
That
comes
in
part
because
the
median
is
skewing
to
the
higher
end.

Sales
of
homes
priced
below
$250,000
were
lower
than
a
year
ago,
while
sales
priced
between
$250,000
and
$500,000
were
up
just
1%.
Sales
priced
between
$750,000
and
$1
million
were
13%
higher,
and
sales
priced
over
$1
million
were
up
nearly
23%.

Cash
is
still
king,
accounting
for
28%
of
sales.
First-time
buyers
are
hanging
in
at
31%
of
sales,
up
from
28%
the
year
before.

Two-thirds
of
homes
went
under
contract
in
less
than
a
month,
so
competition
is
still
strong
despite
higher
prices.
Redfin,
a
real
estate
brokerage,
is
reporting
that
an
increasing
number
of
listings
are
becoming
stale,
so
if
a
home
comes
on
the
market
that
is
well-priced
and
doesn’t
need
much
work,
it
goes
fast.
Other
homes
are
sitting
longer.