ARLINGTON, Va.—Existing-home sales decreased 0.4% in May as the median existing-home price increased year-over-year for the 75th consecutive month.
"Rising mortgage rates, which reached a seven-year-high in May, added to affordability woes and may have dampened demand," said NAFCU Research Assistant Yun Cohen in a NAFCU Macro Data Flash report.
May's existing-home sales fell to a seasonally adjusted annual rate of 5.43 million. Sales during the month were 3% lower than a year ago.
Sales declined in three of the four regions during May. Sales in the Midwest decreased 2.3%, followed by the West (-0.8%) and the South (-0.4%). Sales in the Northeast increased 4.6% from the previous month, Cohen said.
Based on current sales, there were 4.1 months of supply at the end of May, up from 4 months in April. Analysts consider six months of supply to be roughly balanced between supply and demand. Inventory rose 2.8% in May but was still 6.1% lower than a year ago. Inventory has declined year-over-year for 36 consecutive months, Cohen noted.
"While inventory rose for the fifth consecutive month in May, it was not sufficient to overcome the supply-side shortage," Cohen said. "The market remains tight and competition continues to drive prices higher. A typical property sold in May went under contract in merely 26 days, and the list-to-sale time will likely trend down further in the coming months."
The median existing-home price increased from $257,900 in April to $264,800 (not seasonally adjusted) in May. This is 4.9% higher than the median price from a year ago.