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NAR: Existing-Home Sales Increased to 4.30 million SAAR in May
Median Prices Declined 3.1% YoY in May
From the NAR: Existing-Home Sales Edged Higher by 0.2% in May
Existing-home sales marginally increased in May, according to the National Association of REALTORS®. Sales were mixed among the four major U.S. regions, with the South and West posting improvements and the Northeast and Midwest experiencing pullbacks. 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).
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 3.0-month supply at the current sales pace, up from 2.9 months in April and 2.6 months in May 2022.
The sales rate was slightly above the consensus forecast.
Sales in May (4.30 million SAAR) were up 0.2% from the previous month and were 20.4% below the May 2022 sales rate.
Sales Year-over-Year and Not Seasonally Adjusted (NSA)
The second graph shows existing home sales by month for 2022 and 2023.
Sales declined 20.4% year-over-year compared to April 2022. This was the twenty-first consecutive month with sales down year-over-year. Since sales were declining all year in 2022, the year-over-year declines are getting smaller - even though sales have been mostly flat this year in the low-to-mid 4 million range (SAAR).
The third graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black and light Purple are the maximum sales per month during the bubble (2005) and the minimum sales during the bust (2008 - 2011). The most recent five years are shown (2019 through 2023).
Sales NSA in May (408,000) were 18.2% below sales in May 2022 (499,000). On an NSA basis for the month of May, sales were 8.5% above the record low for May during the first months of the pandemic (372,000 in May 2020), and above the low during the housing bust (376,000 in May 2009).
This decrease in sales, NSA, was similar to change in the markets I track each month.
Housing Inventory Increased in April
The fourth graph shows nationwide inventory for existing homes.
According to the NAR, inventory increased to 1.08 million in May from 1.04 million in April.
Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The fifth graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory was down 6.1% year-over-year (blue) in May compared to May 2022. Months of supply (red) increased to 3.0 months in May from 2.9 months in April.
Median House Prices Declined 3.1% Year-over-Year
On prices, the NAR reported:
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.
Median prices are distorted by the mix (repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices).
The YoY change in the median price peaked at 25.2% in May 2021 and prices are now down 3.1% YoY. Median house prices increased 2.6% from April to May and are down 4.3% from the peak in June 2022 (NSA).
It is likely the Case-Shiller index will be down soon year-over-year.
Note that closed sales in May were mostly for contracts signed in March and April. Mortgage rates, according to the Freddie Mac PMMS, average around 6.4% in March and April. June sales will be for contracts signed in April and May, when mortgage rates also averaged around 6.4%, so closed sales will likely be similar in June compared to May.
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