Existing-home sales slide in May as price passes $407K

Low inventory still limiting deals

National /
Jun.June 21, 2022 06:05 PM
(iStock, Illustration by Kevin Cifuentes for The Real Deal)

(iStock, Illustration by Kevin Cifuentes for The Real Deal)Nisha Shetty

Existing-home sales went down for the fourth consecutive month, slumping by 3.4 percent in May from the previous month, the National Association of Realtors reported Tuesday.

The tide isn’t turning anytime soon, with low inventory, high mortgage rates and higher prices limiting deals and sidelining some would-be buyers.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” said NAR chief economist Lawrence Yun in a statement.

The interest rate for 30-year, fixed-rate mortgages jumped to 5.23 percent in May, up from 4.98 percent in April, according to Freddie Mac. On Tuesday the average rate was 6 percent.

However, as sales slowed, housing prices continued to soar in May. The median price for existing homes rose 14.8 percent in May from a year earlier to a record $407,600. That’s no surprise: The median price has consistently hit record highs each month from the year before for nearly 10 years.

Yun suggested that the inventory levels needed to nearly double for the appreciation of home prices to slow down.

Across the country, there were 1.16 million units for sale or under contract at the end of May, up 12.6 percent from April and down 4.1 percent from May 2021, according to the NAR.

The pace of price appreciation ticked up everywhere in the U.S., with the largest increase in the South (for the ninth consecutive month), followed by the West, then the Midwest and Northeast.

Homes that sold were not on the market for long, as has been the case for a while. Properties that went into contract last month typically were on the market for 16 days, down from 17 days in April and 17 days in May 2021. Only 12 percent of homes sold in May were on the market for more than a month.

Demand for houses has exceeded supply since the start of the pandemic. Some Americans accelerated buying plans or sought to take advantage of remote work and low interest rates, while would-be sellers were able to change jobs without moving or refinanced before rates rose. But with remote work becoming the new normal, housing inventory could continue to get squeezed.





    Related Articles

    arrow_forward_ios
    L.A. Metro board members Sheila Kuehl, Hilda Solis and rendering of new transit stops with high-end condos in Pasadena and North Hollywood (SCNG photographers, LA Metro)
    The anti-NY strategy: LA transit buys land to stop gentrification
    The anti-NY strategy: LA transit buys land to stop gentrification
    Paul Simon, Edie Brickell, 82 Brookwood Lane in New Canaan, CT (Getty Images, Houlihan Lawrence)
    Slip slidin’ away: Paul Simon sells New Canaan estate at loss
    Slip slidin’ away: Paul Simon sells New Canaan estate at loss
    Pavilion A at the Woolworth Tower Residences (Travis Mark)
    Woolworth Tower apartment featured in “Succession” sells for $20M
    Woolworth Tower apartment featured in “Succession” sells for $20M
    From left: Tyler Whitman, Ryan Serhant, Kirsten Jordan, Frederik Eklund, and Steve Gold from "Million Dollar Listing New York" (Kareem Black/Bravo, iStock)
    Bravo pausing “Million Dollar Listing NY” after 9 seasons
    Bravo pausing “Million Dollar Listing NY” after 9 seasons
    Henry Wells and 158 Clinton Street (Wells Fargo, Street Easy)
    American Express tycoon’s 174-year-old townhouse tops BK luxury market
    American Express tycoon’s 174-year-old townhouse tops BK luxury market
    Samsung Heiress Lee Seo-hyun and 212 Fifth Avenue (Getty Images, Google Maps, iStock)
    Korean heiress buys 212 Fifth pad
    Korean heiress buys 212 Fifth pad
    From left: 56 Leonard Street and 443 Greenwich Street with Justin Timberlake and Jessica Biel (Getty, StreetEasy, iStock)
    TRD Pro: Ranking Tribeca’s priciest residential deals of the past year
    TRD Pro: Ranking Tribeca’s priciest residential deals of the past year
    Cooling, Market
    The stats don’t lie: NY’s housing markets are cooling
    The stats don’t lie: NY’s housing markets are cooling
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...