ARLINGTON, Va.—Existing-home sales continued to fall in May, tumbling an additional 9.7% to a seasonally adjusted annual rate of 3.91 million units and reaching its lowest level since 2010. But the news isn’t all bad.
The drop represents a 26.6% decrease in sales versus a year ago.
"Sales totals measure completed sales, and therefore reflect decisions that were often made in March and April," noted NAFCU Chief Economist and Vice President of Research Curt Long. "The recent surge in mortgage applications means the May total is likely the bottom for the existing homes market."
"Homebuilders remain nervous, with housing starts falling to 2015 levels. A V-shaped path is likely to prove elusive for the broader economy, but housing is a different story, and it may yet lead the recovery," Long added.
Sales decreased in all four regions during the month, most significantly in the Northeast (-13%) and West (-11.1%), regions hardest-hit by the pandemic. Sales were down 10% and 8% in the Midwest and South, respectively.
Supply Levels
Based on current sales levels, there was 4.8 months of supply at the end of May, up 0.7 months from April. Analysts consider six months of supply to be roughly balanced between supply and demand, Long said.
The median existing home price fell slightly from $286,800 the previous month to $284,600 in May (not seasonally adjusted). The amount represents a 2.3% increase from the median price a year ago.