For buyers, affordability challenges persist
of ConsumerAffairs-
Existing-home sales rose 0.8% in May, driven by regional gains in the Northeast, Midwest, and South.
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Inventory grew over 20% year-over-year, while the median U.S. home price hit a May record of $422,800.
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High mortgage rates continue to suppress broader market activity, but economists anticipate a rebound if rates fall.
The U.S. housing market showed modest signs of recovery in May as existing-home sales edged up 0.8% month-over-month, according to the National Association of Realtors.
However, persistent affordability challenges and elevated mortgage rates continued to temper overall sales activity compared to a year ago.
Sales gains were concentrated in the Northeast, Midwest, and South, with the West registering a sharp 5.4% monthly decline. Year-over-year, the Northeast led the nation with a 4.2% increase in home sales, followed by the Midwest at 1.0%. In contrast, the South saw a slight 0.5% decline, while the West lagged further with a 6.7% drop compared to May 2024.
The relatively subdued sales are largely due to persistently high mortgage rates, said NAR Chief Economist Lawrence Yun. 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.
Home prices and inventory trends
Nationally, the median existing-home price for all housing types climbed to $422,800an all-time high for the month of May and a 1.3% increase from a year ago. This marks the 23rd consecutive month of year-over-year price gains.
However, that number can be misleading. It suggests that many homes were purchased by upper-income buyers who could afford more expensive homes. It also suggests fewer lower-priced homes sold because any would-be buyers still cant afford them.
Total housing inventory reached 1.54 million units, up 6.2% from April and 20.3% compared to May 2024. The market now holds a 4.6-month supply of unsold homes, up from 3.8 months a year earlierindicating a slight loosening in tight housing conditions.
Sales of single-family homes rose 1.1% from April to a pace of 3.67 million units, nearly matching year-ago levels. The median price for these properties increased 1.3% year-over-year to $427,800.
In contrast, condominium and co-op sales fell 2.7% to a seasonally adjusted annual rate of 360,000 unitsa steep 10% decline from May 2024. Their median price nudged up slightly to $371,300, a 0.7% gain year-over-year.
Posted: 2025-06-23 16:04:14
