Existing-home sales in the South expanded 1.5%
Key Highlights
- Existing-home sales recorded a minor gain of 0.2% in May to a seasonally adjusted annual rate of 4.30 million. Sales retreated 20.4% from one year ago.
- The inventory of unsold existing homes grew 3.8% from the previous month to 1.08 million at the end of May or the equivalent of 3 month supply at the current monthly sales pace.
- NAR leaders say a temporary capital gains tax reduction on a sale of investment property can lead to a boost in housing inventory.
Upper Cumberland– The housing market has been bonkers over the past few years. Housing costs have grown and the price of doing business for families and the middle class have become exorbitant.
Home sales are stabilizing and expanding, however. Existing-home sales in the South expanded 1.5% from April to an annual rate of 2.02 million in May, sliding 16.5% from the prior year. That was a posted improvement. The median price in the South was $361,400, down 2.7% from May 2022.
As for nationally, existing-home sales marginally increased in May, according to the National Association of Realtors, but sales were mixed among the four major U.S. regions. All four regions experienced year-over-year sales declines. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.2% from April to a seasonally adjusted annual rate of 4.30 million in May.
Year-over-year, sales dropped 20.4% (down from 5.40 million in May 2022).
“Mortgage rates heavily influence the direction of home sales,” said NAR Chief Economist Lawrence Yun. “Relatively steady rates have led to several consecutive months of consistent home sales.”
Total housing inventory registered at the end of May was 1.08 million units, up 3.8% from April but down 6.1% from one year ago (1.15 million). Unsold inventory sits at a 3 month supply at the current sales pace, up from 2.9 months in April and 2.6 months in May 2022.
“Available inventory strongly impacts home sales, too,” Yun added. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
The median existing-home price for all housing types in May was $396,100, a decline of 3.1% from May 2022 ($408,600). Prices grew in the Northeast and Midwest but fell in the South and West. Properties typically remained on the market for 18 days in May, down from 22 days in April but up from 16 days in May 2022. Seventy-four percent of homes sold in May were on the market for less than a month.
First-time buyers were responsible for 28% of sales in May, down from 29% in April but up from 27% in May 2022. NAR’s 2022 Profile of Home Buyers and Sellers, released in Nov. 2022, found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 25% of transactions in May, down from 28% in April and identical to one year ago.
Individual investors or second-homebuyers, who make up many cash sales, purchased 15% of homes in May, down from 17% in April and 16% the previous year. Distressed sales, foreclosures and short sales, represented 2% of sales in May, virtually unchanged from last month and the prior year. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.69% as of June 15. That’s down from 6.71% the previous week but up from 5.78% one year ago.
Single-family home sales dipped to a seasonally adjusted annual rate of 3.85 million in May, down 0.3% from 3.86 million in April and 20.0% from the previous year. The median existing single-family home price was $401,100 in May, down 3.4% from May 2022. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 450,000 units in May, up 4.7% from April but down 23.7% from one year ago. The median existing condo price was $353,000 in May, nearly identical to the prior year ($353,100).
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