As rising mortgage rates and higher home prices continued to price out homebuyers, existing home sales declined for four consecutive months, according to the National Association of Realtors (NAR). However, the trend in home price appreciation continued as supply remained tight. The median existing home prices in May surpassed $400,000, the highest level on record since 1999.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 3.4% to a seasonally adjusted annual rate of 5.41 million in May. On a year-over-year basis, sales were 8.6% lower than a year ago.
The first-time buyer share fell to 27% in May, down from 28% in April and down from 31% a year ago. The May inventory level increased from 1.03 to 1.16 million units but was still down from 1.21 million units a year ago.
At the current sales rate, May unsold inventory sits at a 2.6-month supply, up from 2.2-months last month and 2.5-months a year ago. This low supply of resale homes is ongoing good news for home construction.
Homes stayed on the market for an average of just 16 days in May, down from 17 days in April 2022 and May 2021. In May, 88% of homes sold were on the market for less than a month.
The May all-cash sales share was 25% of transactions, down from 26% last month and up from 23% a year ago.
Tight supply continues to push up home prices. The May median sales price of all existing homes was $407,600, up 14.8% from a year ago, representing the 123rd consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $355,700 in May was up 14.8% from a year ago.
Regionally, existing home sales were mixed in May. Sales in the Northeast rose 1.5% last month, while sales in the Midwest, South and West fell 5.3%, 2.8% and 5.3%, respectively. On a year-over-year basis, sales in all four regions declined in May, ranging from 7.5% in the Midwest to 10.0% in the West.
Meanwhile, the Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI decreased 3.9% from 103.3 to 99.3 in April. On a year-over-year basis, sales were 9.1% lower than a year ago per the NAR data.