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Existing home sales rose but flounder at low levels. Rising inventory will eventually impact prices.

The NAR reports Existing-Home Sales Increase 0.8% in May

Six Key Highlights

• Existing-home sales rose 0.8 percent in May to a seasonally adjusted annual rate of 4.03 million.
• Sales are down 0.7 percent from one year ago.
• The median existing-home sales price climbed 1.3 percent from May 2024 to $422,800, an all-time high for the month of May and the 23st consecutive month of year-over-year price increases.
• The inventory of unsold existing homes jumped 6.2 percent from the previous month to 1.54 million at the end of May
• Supply is 4.6 months at the current monthly sales pace.
• Sales are down 36.4 percent from the cycle high of 6.34 million in January of 2022.

NAR Chief Economist, Lawrence Yun, notes “”The relatively subdued sales are largely due to persistently high mortgage rates. Lower interest rates will attract more buyers and sellers to the housing market. Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs.”

These cheerleaders never discuss recession.

Factor in mortgage rates near 7 percent, a slowing economy, and massive tariff uncertainty. Housing is going nowhere until prices collapse and mortgage rates come down.

Yun cannot say that, so he sings the same happy tune for years.

The best thing the NAR has going for it is rising inventory that will eventually pressure prices. But homes are light years away from being affordable.

Existing-Home Sales Percent Change from Month Ago

Existing-Home Sales Percent Change from Year Ago

Year-over-year comparisons are now pretty easy so we may see more meanderings above the zero line if sales hold at these levels and especially if they advance.

Existing-Home Sales Supply

Data that is allegedly seasonally adjusted sure does not look like it.

Regardless inventory is building and that will eventually pressure prices and likely is already.

Median sales price is not the best metric. Case-Shiller home prices, a measure of repeat sales over time, is the best measure but it lags by about 4 months. Case-Shiller reports tomorrow.

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