Final Look at Local Housing Markets in May

Each month I track closed sales, new listings and active inventory in a sample of local markets around the country (over 40 local housing markets) in the US to get an early sense of changes in the housing market. In addition, we can look for regional differences. For example, listings in Texas and Florida are up more than in most other areas, and sales are down less year-over-year.

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR (and I’m frequently adding more markets). This is the final look at local markets in May.

The big story for May existing home sales was the large year-over-year (YoY) decline in sales. Also new listings were down sharply YoY.

First, here is a table comparing the year-over-year Not Seasonally Adjusted (NSA) declines in sales since January 2022 from the National Association of Realtors® (NAR) with the local markets I track. So far, these measures have tracked pretty well. The NAR reported sales were down 18.2%% NSA YoY in May.

Active Inventory in May

Here is a summary of active listings for these early reporting housing markets in May.

Inventory in these markets were up 58% YoY in January and are now only up 6% YoY. This is a significant change.

It is likely that inventory in these markets will be down YoY in June.

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver or Minneapolis (included in state totals)

   

New Listings in May

And here is a table for new listings in May (some areas don’t report new listings). For these areas, new listings were down 20.0% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.

Last month, new listings in these markets were down 23.6% YoY. The decline in new listing in May - for these areas - was somewhat less than the YoY decline in April.

Closed Sales in May

And a table of May sales.

In May, sales in these markets were down 17.4%. In April, these same markets were down 26.1% YoY Not Seasonally Adjusted (NSA).

My early expectation is we will see a somewhat similar level of sales in June on a seasonally adjusted annual rate basis (SAAR) as in May. 30-year mortgage rates averaged about 6.4% in March and April (for closed sales in May), and 30-year rates averaged close to 6.4% in April and May.

On a Not Seasonally Adjusted (NSA) basis, June is usually the strongest month of the calendar year for closed sales, followed by July and August.

This graph shows existing home sales by month for 2022 and 2023. Since sales were declining every month last year, seasonally adjusted, the YoY decline will be less as the year progresses - and sales might even be up YoY at the end of 2023.

More local data coming in July for activity in June!