A report released by the National Association of Realtors on Thursday unexpectedly showed a modest increase in U.S. existing home sales in the month of May.
NAR said existing home sales crept up by 0.2 percent to an annual rate of 4.30 million in May after tumbling by 3.2 percent to a revised rate of 4.29 million in April.
The uptick surprised economist, who had expected existing home sales to decrease by 0.6 percent compared to the 3.4 percent plunge originally reported for the previous month.
“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.”
The modest increase in existing home sales came as significant increases in sales in the West and South helped offset steep drops in sales in the Northeast and Midwest.
The report also said housing inventory at the end of May totaled 1.08 million units, up 3.8 percent from April but down 6.1 percent from a year ago.
The unsold inventory represents 3.0 months of 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 said. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector.”
He added, “However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
NAR also said the median existing home price for all housing types was $396,100 in May, a decline of 3.1 percent from $408,600 in May 2022. Prices grew in the Northeast and Midwest but fell in the South and West.
Next Tuesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May. Economists currently expect new home sales to climb by 0.5 percent in May after surging by 4.1 percent in April.
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