Existing home sales rose to a five-month high in May as more first-time buyers stepped back into the market. The share of first-time buyer reached 35% in May, the highest since June 2020. However, sales remained weak compared to historical norms, with still-tight inventory continued to push up home prices. Mortgage rates, though lower than a year ago, have increased more than 50 basis points since the Iran war began in late February and remain stuck around 6.5% in recent weeks. Energy shock has reaccelerated inflation, which has outpaced wage growth, further weighing on housing affordability.
Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 3.2% to a seasonally adjusted annual rate of 4.17 million in May, the highest since December 2025, according to the National Association of Realtors (NAR). On a year-over-year basis, sales were 3.2% higher from a year ago.
The existing home inventory level was 1.55 million units in May, up 3.3% from April and 0.6% from a year ago. At the current sales rate, May unsold inventory sits at a 4.5-months’ supply, unchanged from April but lower than 4.6-months a year ago. Inventory between 4.5 to 6 months’ supply is generally considered a balanced market.
Homes stayed on the market for a median of 29 days in May, down from 32 days in the previous month but up from 27 days in May 2025.
The first-time buyer share was 35% in May, the highest share in nearly six years. The share was up from 33% in April and 30% a year ago.
The May all-cash sales share was 25% of transactions, unchanged from last month but down from 27% in May 2025. All-cash buyers are less affected by changes in interest rates.
The May median sales price of all existing homes was $429,300, up 1.3% from last year. This marks the 35th consecutive month of year-over-year increases. The median condominium/co-op price in March was up 1.7% from a year ago at $378,200. Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2026.
Existing home sales in May were mixed across the four major regions. Sales rose in the Midwest (+6.4%), South (+3.2%) and Northeast (+2.2%) but remained unchanged in the West. On a year-over-year basis, sales declined in the Northeast (-8.0%) but increased in the South (+5.9%), West (5.6%) and Midwest (2.0%).
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 73.8 to 74.8 in April. PHSI data is typically released about a week after existing home sales reports. On a year-over-year basis, pending sales were 3.2% higher than a year ago, according to the National Association of Realtors’ data. However, resurgence in mortgage rates driven by the Iran war could reverse the increase.
