Sales of existing homes continued to decline in May, for the fourth month in a row, affected by the rise in interest rates.
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The median selling price of existing homes at $407,600
Over the month, 5.41 million houses and apartments changed owners, a number of resales in line with analysts’ expectations but down 3.4% compared to April and 8.6% compared to a year ago, according to the National Federation of American Realtors (NAR). This is the lowest level since June 2020, she detailed in a press release. At $407,600, the median selling price for existing homes passed the $400,000 mark for the first time and represents a 14.8% increase from a year ago, the federation added. The stock of existing unsold homes stood at 1.16 million at the end of May, the equivalent of 2.6 months at the current rate of monthly sales.
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“Home resales have broadly returned to levels seen in 2019 – before the pandemic – after two years of stunning performance“Reacted the chief economist of the NAR, Lawrence Yun, quoted in a press release. He further notes that the trend of moving to the suburbs, which has prevailed during the pandemic, is fading with “a return to pre-pandemic conditions“. He also expects further declines in sales of existing homes in the coming months, given the high costs associated with the sharp rise in mortgage rates this year. “Nonetheless, appropriately priced homes are selling quickly and inventory levels still need to rise significantly – almost double – to cool home price increases and provide more options for buyers.“, he finally commented.
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