Despite bidding wars in many parts of America, sales of existing homes fell 0.9% from April to May, according to the National Association of Realtors (NAR), marking the fourth consecutive month of small declines . Meanwhile, amid fears of a housing bubble, all regions saw double numerical annual gains.
Sales “are approaching pre-pandemic activity,” said NAR chief economist Dr Lawrence Yun. “Lack of inventory continues to be the main factor holding back home sales, but declining affordability is simply excluding some first-time buyers from the market. “
“The market outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help lower record asking prices for existing homes.”
MBA AVP of Economic and Industry Forecasting, Joel Kan also sees a silver lining. He said: “The 7% increase in inventory for sale, which should improve pricing conditions slightly,” was one of the positive developments.
The median home price in May rose 23.6% over the year to reach $ 350,300, a record high and the 111th consecutive month of year-over-year gains.
The average number of days on the market was unchanged for the month, remaining at 17 days, down from 26 days in May 2020. In total, 89% of homes sold during the month were on the market for less than 30 days.
Dr Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021, with a rate of 2.96% in May, from 3.06% in April, according to Freddie Mac .
In the Northeast, sales fell 1.4% in May, but are up 46.9% from May 2020. The median price rose 17.1% per year to $ 384,300.
The Midwest was up 1.6% for the month and 27.2% for the year. The median price rose 18.1% for the year to $ 268,500.
In the South, sales were down 0.4%, up 47.2% from May 2020. Here, the median price rose 22.6% to $ 299,400.
Finally, home sales in the West fell 4.1% for the month, but were up 61.6% from the previous May. Selling prices increased 24.3% for the year to reach $ 505,600.
NAR recently called on lawmakers to take “immediate” and “once a generation” action on the current housing supply crisis, so we will be monitoring the impact of the market in the coming months.