Home sales fell for the fourth month in a row, but prices continue to rise– more evidence that there aren’t enough houses to go around. That’s according to data released last month by the National Association of Realtors. Of the 4 major U.S. regions, only the mid-west recorded a month-over-month increase. The other three regions saw sales decline. Each of the four regions, however registered double-digit year-over-year gains again.
“Home sales fell moderately in May and are now approaching pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.
“The market’s outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”
In May, the existing-home price for all housing types was up $350,300. That number is up from $283,500 from May of last year. An increase of 23.6%. This marks 111 straight months of year-over-year gains, a record high since March 2012.
The total housing inventory at the end of May consisted of approximately 1.23 million units, number that is up 7% from April’s inventory. In May of 2020 the total housing inventory was at 1.55 million, a 20.6% decrease. Of the 1.23 million unites of total inventory sits a 2.5-month supply of unsold inventory at the present sales pace. This is up marginally from April’s 2.4-month supply while down from 4.6-months from a year ago.
The properties generally stayed on the market for about 17 days in the month of May which was unchanged from April. However, that number was down from 26 days last year. 89 percent of the homes that sold in May of this year were on the market for less than a month.
31% of sales in May were purchased by first-time homebuyers. This is even with the numbers from a month prior but down 34% from a year ago. According to NAR’s 2020 Profile of Home Buyers and Sellers that was released late last year, the annual share of first-time buyers was 31%.
“As outlined in last week’s NAR/Rosen Consulting Group report, we continue to face a dire shortage of available housing in this country,” said NAR President Charlie Oppler. “NAR continues its advocacy efforts to find new, creative and effective ways to increase housing construction and supply.” He went on to say, “The right policies will provide huge benefits to our nation’s economy, and our work to close this gap will be particularly impactful for lower-income households, households of color and first-time buyers.”
You can find the National Association of Realtor’s full report here.