WASHINGTON (June 21, 2022) – For the fourth consecutive month, existing home sales have rebounded in May, according to the National Association of Realtors. Month-to-month sales fell in three of the four major US regions, but sales fell year-on-year in all four regions.
Total Selling an existing home,1 Completed transactions involving single-family homes, townhomes, condominiums and co-ops fell 3.4% from April, to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales were down 8.6% (5.92 million in May 2021).
“Home sales are essentially back to the levels they saw in 2019 – before the epidemic – after two years of gangbuster performance,” said NAR chief economist Lawrence Yun. “Also, single-family and condominium sales market movements are almost identical, suggesting that the preference for suburban life over urban life, which has been present over the last two years, is fading away with a return to pre-epidemic conditions.”
Total residential inventory2 1,160,000 units registered at the end of May, a 12.6% increase from April and a 4.1% decrease from the previous year (1.21 million). Unsold inventory is currently at a 2.6-month supply of sales speed, 2.2 months in April and 2.5 months in May 2021.
“Given the housing affordability challenges from the sharp rise in mortgage rates this year, further sales declines in the coming months,” Yun added. “Nevertheless, suitable-priced homes are selling quickly, and inventory levels still need to rise significantly – almost doubling – to cool the home price appreciation and provide more options for home buyers.”
Average Existing Home Price5 $ 407,600 for all residential types in May, up 14.8% from May 2021 ($ 355,000), as prices increased in all areas. This represents a 123-month year-over-year increase, the longest-running series on record.
Properties generally remain on the market for 16 days in May, down from 17 days in April and 17 days in May 2021. In May 2022, 88 percent of homes sold were on the market in less than a month.
First-time buyers were responsible for 27% of sales in May, down from 28% in April and 31% in May 2021. 2021 of NAR Home Buyers and Sellers Profile – Released at the end of 20214 – First-time buyers report an annual share of 34%.
All cash sales were up 25% in May, down from 26% in April and up from 23% recorded in May 2021.
Individual investors or second-home buyers, who make the most cash sales, bought 16% of homes in May, down from 17% in April and 17% in May 2021.
Sales of hardship5 – Foreclosures and Short Sales – represents less than 1% of sales in May, essentially unchanged from April 2022 and May 2021.
According to Freddie Mac, the average commitment rate for a 30-year, traditional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate in 2021 is 2.96%.
Realtor.com®’s Market Trends Report shows the largest average list price growth year-over-year in Miami (+ 45.9%), Nashville (+ 32.5%), and Orlando (+ 32.4%) in May. Austin reported the highest growth in home share compared to last year (+14.7 percentage points), followed by Las Vegas (+12.3 percentage points) and Phoenix (+11.6 percentage points).
Single-family and condo / cooperative sales
Single-family home sales fell to a seasonal adjusted annual rate of 4.80 million in May, down 3.6% from 4.98 million in April and 7.7% a year ago. The average price of an existing single-family home was $ 414,200 in May, up 14.6% from May 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in May, down 1.6% from April and 15.3% a year ago. The average existing condo price was $ 355,700 in May, an annual increase of 14.8%.
“Declining home purchases mean more people are renting, and the resulting rent price spike prompts more corporate investors to buy single-family homes and turn them into rental properties – putting additional financial pressure on prospective first-time home buyers,” said NAR president Leslie. Rowda Smith, Realtor ನಿಂದ from Plano, Texas and a broker associate at Dave Perry-Miller Real Estate in Dallas. “To combat this trend, policymakers should consider promoting inventory release to the market by temporarily lowering capital gains taxes for Mom and Pop investors to sell to first-time buyers.”
Existing home sales in the Northeast rose 1.5% in May, reaching an annual rate of 680,000, a drop of 9.3% from May 2021. The average price in the Northeast was $ 409,700, up 6.7% from a year ago.
Existing-home sales in the Midwest fell 5.3% year-over-year to 1,240,000 in May, down 7.5% from May 2021. The average price in the Midwest was $ 294,500, a 9.5% increase over the previous year.
Existing home sales in the South fell 2.8% to $ 2,410,000 in May, down 8.4% from the previous year. The average price in the South was $ 375,000, a jump of 20.6% from a year ago. For the ninth consecutive month, the South recorded the highest price increase compared to the other three regions.
Existing-home sales in the West fell 5.3% in May to an annual rate of $ 1,080,000, down 10.0% from a year earlier. The average price in the West was $ 633,800, an increase of 13.3% from May 2021.
The National Association of Realtors ® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
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For local information, please contact Realtors®’s local association for local Multiple Listing Services (MLS) data. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in the method of reporting.
Note: NAR’s pending home sales index for the month of May is scheduled for release on June 27, and existing home sales for June will be released on July 20. Release time is 10am Eastern.
1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closures from multiple listing services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR periodically benchmarks home sales using other sources to assess overall home sales trends, including unreported sales by MLSs.
This is different from the US Census Bureau’s series on new single-family home sales based on existing-home sales, contracts, or deposit acceptance based on closures. Given these differences, it is not uncommon for each series to move in different directions in the same month. Additionally, existing home sales account for more than 90% of total home sales, based on a much larger data model – about 40% of multi-listing service data per month – and are generally not subject to large pre-month revisions.
The annual sales rate for a given month represents the total number of actual sales in a year if the relative speed of that month is maintained for 12 consecutive months. Seasonally adjusted annual rates are used to report monthly data to exclude seasonal differences in resale activity. For example, home sales rates are usually higher in summer than in winter, primarily due to differences in weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; The series was combined in 1999 when the monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historical comparisons of total home sales before 1999 are based on monthly single-family sales, combined with quarterly sales rates for condos.
2 Total inventory and month supply data were available by 1999, while single-family inventory and month supply were available until 1982 (before 1999, single-family sales accounted for over 90% of transactions and condos were measured quarterly only).
3 The middle price means that there is half as much and half as low; Medium prices are more typical market conditions than average prices, which tend to be more skewed by the relatively small share of upper-level transactions. Valid comparisons are only for average prices with the same period a year ago due to seasonality in purchase models. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in sales composition can distort average price data. Average and average prices for the year are sometimes revised in the automated process if additional data is received.
The national average condo / co-op price is usually higher than the median single-family home price because the condos are concentrated in high-cost housing markets. However, in a given area, single-family homes usually sell more than condos, as seen in NAR’s quarterly metro area price reports.
4 The results of the survey represent owners and are different from the monthly findings reported separately from NAR’s Realtors® Confidence Index covering all types of buyers. Investors are underrepresented in the annual study because the survey questionnaires are mailed to the addresses of the purchased property and are generally not returned by absentee owners. The results include new and existing homes.
5 A monthly survey of NAR’s Realtor® Confidence Index, posted on Nor.Realter, shows distressed sales (acquisitions and short sales), days in the market, first-time buyers, all cash transactions and investors.