According to a recent report released by the National Association of Realtors (NAR), May’s existing-home sales took a hit, falling 9.7% in May.
May’s total sales overall year-over-year also dipped—falling 26.6% from May 2019’s 5.53 million.
According to the NAR, it was the Northeastern portion of the nation that was hit the hardest, experiencing the greatest decline in month-over-month sales numbers.
NAR’s Chief Economist Lawrence Yun commented on the disappointing numbers, while offering some hope for a future rebound: “Sales completed in May reflect contract signings in March and April—during the strictest times of the pandemic lockdown and hence the cyclical low point. Home sales will surely rise in the upcoming months with the economy reopening and could even surpass one-year-ago figures in the second half of the year.”
Yun then pointed to what needs to happen for this market niche to start to mend: “New home construction needs to robustly ramp up to meet rising housing demand. Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”
The NAR revealed the median existing-home price in May was $284,600—up 2.3% from May 2019 and was the 99th straight month for annual gains.
Total housing inventory3 at the end of May totaled 1.55 million units, which is up 6.2% from April and down 18.8% from one year ago (1.91 million). Unsold inventory sits at a 4.8-month supply at the current sales pace, up from 4.0 months in April and up from the 4.3-month figure recorded in May 2019.
“New home construction needs to robustly ramp up in order to meet rising housing demand,” Yun said. “Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates."