The National Association of REALTORS®’ (NAR) most recent existing-home sales report shows that existing-home sales rose 0.2% in April, reaching a seasonally adjusted rate of 4.3 million.
Tracking national sales for the month of May 2023, the data shows a slight bump month-over-month, but an overall decline year-over-year.
Key data points:
- In May 2023, completed transactions of homes (counting SFHs, condos, co-ops, and townhouses) rose only 0.2% from April. Year-over-year, this is a 20.4% decline from the 5.4 million completed sales in May 2022.
- The median price for existing homes was $396,100, a decline of 3.1% from May 2022 ($408,600).
- Total inventory at the end of the month was 1.08 million, a 3.8% increase from April, but a 6.1% decrease from May 2022.
- Properties remained on the market for an average of 18 days, down from 22 days in April, but up from 16 days in May 2022.
- Twenty-eight percent of sales were completed by first-time homebuyers; in April, this was 29%, in May 2022, it was 27%.
- Individual investors/second-homebuyers made up 15% of transactions, down from 17% in April and 16% in May 2022.
- All-cash sales accounted for 25% of overall closed transactions, the same as a year prior. However, this is a 3% drop from April.
- Distressed sales represented 2% of transactions, “virtually unchanged” from the previous month and year.
- Freddie Mac found that the 30-year fixed-rate mortgage averaged 6.69% as of June 15, up from 5.78% one year ago.
Single-family and condo/co-op sales:
- Single-family home sales dipped to a seasonally adjusted annual rate of 3.85 million in May, down 0.3% from 3.86 million in April and 20% from May 2022.
- The median existing single-family home price was $401,100 in May, down 3.4% from May 2022.
- Existing condominium and co-op sales reached a seasonally adjusted annual rate of 450,000 units in May, up 4.7% from April, but down 23.7% from May 2022.
- The median existing condo price was $353,000, nearly identical to the previous year’s price of $353,100.
Regional breakdown:
- In general, existing-home sales posted gains in the South and West during May 2023, but faced losses in the Northwest and Midwest.
- Northeast: annual rate of 500,000, down 2% from April and 25.4% from May 2022.
- Midwest: annual rate of 990,000, down 2.9% from April and 20.8% from May 2022.
- South: annual rate of 2.02 million, up 1.5% from April, but down 16.5% from May 2022.
- West: annual rate of 790,000, down 2.6% from April and 25.5% from May 2022.
- Median prices grew in the Northeast and Midwest, but fell in the South and West.
- Northeast: $439,000, up 2.5% from May 2022.
- Midwest: $298,000, up 1.1% from May 2022.
- South: annual rate of 2.02 million, up 1.5% from April, but down 16.5% from May 2022.
- West: annual rate of 790,000, down 2.6% from April and 25.5% from May 2022.
Takeaways:
“A temporary capital gains tax reduction on a sale of investment property can lead to a boost in housing inventory, home sales and the economy. Policymakers need to seriously consider the measure,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker/owner of Equity Real Estate Utah.
“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. Available inventory strongly impacts home sales, too. Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
Realtor.com Chief Economist Danielle Hale commented:
“Sales of existing homes steadied in May, increasing 0.2% to a pace of 4.30 million as gains in the South and West offset mild declines in the Northeast and Midwest. The pace of home sales continues to exceed the 4 million sales low reached in January, yet it still lags year ago sales by a considerable 20.4%.
“Mortgage rates in April were relatively steady, and the median home sale price continued to decline modestly, dropping 3.1% from May 2022. This gave buyers time to shop without fear of having to reset their housing budgets while on the hunt. Nevertheless, nearly 4 in 5 (78%) home shoppers surveyed this spring thought it at least somewhat likely that they would be priced out of the housing market if home prices and rates continue to rise.
“A dearth of newly listed homes has made it challenging for buyers to find a good match if their criteria are too specific. Although total inventory in May was up 3.8% from April, it was down 6.1% from one year ago, and the number of newly listed homes fell 22.7% behind last May. Nevertheless, a market rendered slightly less competitive amid high costs is opening doors for some buyers. The first-time buyer share dipped from April, but was up to 28% in May from 27% one year ago.
“With fewer homeowners poised to become sellers in 2023, buyers have a tough road ahead. Our revised 2023 outlook expects that there will be some positives, namely, a gradual decline in mortgage rates beginning midyear and a continued softness in home prices that will start to stabilize high housing costs. On net home sales are expected to tally roughly 4.2 million in 2023, their lowest annual total since 2012.”
For the full report, click here.
