Existing Home Sales Rise, But ‘Constraints Continue’

ARLINGTON, Va.—Existing home sales rose 0.2% in May to a seasonally-adjusted annual rate of 4.3 million units, a 20.4% decrease in sales versus a year ago, new data show.

Curt Long, NAFCU

“The overall existing home sales market remained virtually unchanged from last month. However, some regions fared better than others,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Sales look to be stabilizing, coinciding with mortgage rates, which have been more consistent as of late. Demand remains strong as properties remained on the market for an average of only 18 days in May which was four days less than in April. While the year-over-year prices are still subdued, prices month-to-month are on the rise, another signal of strong demand.”

In May, home sales were mixed across the regions. Sales rose 2.6% in the West and 1.5% in the South. Sales in the Midwest and Northeast fell 2.9% and 1.9%, respectively.

‘Constraints to Continue’

Based on current sales, there were nearly three months of supply at the end of May. Analysts consider six months of inventory a rough balance between supply and demand.

“The Fed may have skipped a rate hike this month, but the next rate cut remains well in the future. NAFCU expects supply constraints to continue to hamper housing sales for the rest of 2023,” Long concluded.