Existing Home Sales Edge Higher in May

2025-06-23T13:17:33-05:00

Existing home sales rose 0.8% in May but remained near historical lows, according to the National Association of Realtors (NAR). Despite the modest increase, this marks the slowest pace for May since 2009. The sluggish sales suggest higher mortgage rates and elevated home prices continue to sideline buyers even with improved inventory conditions. Mortgage rates have hovered between 6.5% and 7% due to ongoing economic and tariff uncertainty this year, prompting the Fed to pause interest rate cuts. With mortgage rates expected to stay above 6% for longer due to an anticipated slower easing pace in 2025, these prolonged higher rates and high home prices would continue to weigh on the market. As such, sales are likely to remain limited in the coming months. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 0.8% to a seasonally adjusted annual rate of 4.03 million in May. On a year-over-year basis, sales were 0.7% lower than a year ago. The first-time buyer share was 30% in May, down from 34% in April and 31% from a year ago. The existing home inventory level was 1.54 million units in May, up 6.2% from April, and up 20.3% from a year ago. At the current sales rate, May unsold inventory sits at a 4.6-months’ supply, up from 4.4-months in April and 3.8-months in May 2024. Inventory between 4.5 to 6 month’s supply is generally considered a balanced market. Homes stayed on the market for an average of 27 days in May, down from 29 days in April but up from 24 days in May 2024. The May all-cash sales share was 27% of transactions, up from 25% in April but down from 28% a year ago. All-cash buyers are less affected by changes in interest rates. The May median sales price of all existing homes was $422,800, up 1.3% from last year. This marked an all-time high for the month of May and the 23rd consecutive month of year-over-year increases. The median condominium/co-op price in May was up 0.7% from a year ago at $371,300.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025. Geographically, three of the four regions saw an increase in existing home sales in May, with an increase of 1.7% in the South, 1.0% in the Midwest, and 4.2% in the Northeast. Meanwhile, sales in the West fell 5.4%. On a year-over-year basis, sales were up in the Northeast (4.2%) and the Midwest (1.0%), while sales were down in the South (-0.5%) and the West (-6.7%). The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 76.1 to 71.3 in April, suggesting buyers remained constrained by higher mortgage rates. On a year-over-year basis, pending sales were 2.5% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Edge Higher in May2025-06-23T13:17:33-05:00

Existing Home Sales Fall in April

2025-05-22T12:20:10-05:00

Despite the brief retreat in mortgage rates and increased supply, existing home sales dropped to 7-month low in April, according to the National Association of Realtors (NAR). This unexpected decline suggests buyers’ activity continues to be constrained by economic uncertainty and ongoing affordability challenges even with improved market conditions. While existing home inventory improved , the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged higher rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 0.5% to a seasonally adjusted annual rate of 4.00 million in April. On a year-over-year basis, sales were 2.0% lower than a year ago. The first-time buyer share was 34% in April, up from 32% in March and 33% from a year ago. The existing home inventory level was 1.45 million units in April, up 9.0% from March, and up 20.8% from a year ago. At the current sales rate, April unsold inventory sits at a 4.4-months’ supply, up from 4.0-months in March and 3.5-months in April 2024. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply), but it increases growing competition for home builders. Homes stayed on the market for an average of 29 days in April, down from 36 days in March but up from 26 days in April 2024. The April all-cash sales share was 25% of transactions, down from 26% in March and 28% a year ago. All-cash buyers are less affected by changes in interest rates. The April median sales price of all existing homes was $414,000, up 1.8% from last year. This marked an all-time high for the month and the 22nd consecutive month of year-over-year increases. The median condominium/co-op price in April was up 1.4% from a year ago at $370,100. This rate of price growth will slow as inventory increases. Existing home sales in April were mixed across the four major regions. Sales fell in the West (-3.9%) and Northeast (-2.0%), rose in the Midwest (2.1%), and remained unchanged in the South. On a year-over-year basis, sales were down in the Midwest (-1.0%), South (-3.2%) and West (-1.3%), while remaining flat in the Northeast. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI jumped from 72.1 to 76.5 in March, the largest monthly increase since December 2023. This increase suggests homebuyers are highly sensitive to even small changes in mortgage rates. On a year-over-year basis, pending sales were 0.6% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Fall in April2025-05-22T12:20:10-05:00

Existing Home Sales Receded in March

2025-04-24T12:16:51-05:00

Existing home sales declined in March, according to the National Association of Realtors (NAR), as affordability challenges continued to weigh on the market. For the first time, the median home price surpassed $400,000 for the month of March, underscoring the ongoing pressure on prospective buyers. While mortgage rates have eased slightly, persistent economic uncertainty may continue to limit buyer activity in the near term. While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, declined 5.9% to a seasonally adjusted annual rate of 4.02 million in March. On a year-over-year basis, sales were 2.4% lower than a year ago. The share of first-time buyers rose to 32% in March, up from 31% in February and unchanged from March 2024. The existing home inventory level was 1.33 million units in March, up 8.1% from February and 19.8% from a year ago. At the current sales rate, March unsold inventory sits at a 4.0-months’ supply, up from 3.5 months in February and 3.2 months in March 2024. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 36 days in March, down from 42 days in February but up from 33 days in March 2024. The March all-cash sales share was 26% of transactions, down from 32% in February and 28% a year ago. The March median sales price of all existing homes was $403,700, up 2.7% from last year. This marked the 21st consecutive month of year-over-year increases. The median condominium/co-op price in March was up 1.5% from a year ago at $363,000. This rate of price growth will slow as inventory increases. In March, existing home sales declined across all four major U.S. regions. The West experienced the steepest drop, with sales falling 9.4%, followed by the South (-5.7%), the Midwest (-5.0%), and the Northeast (-2.0%). On a year-over-year basis, sales rose slightly in the West by 1.3%, declined in the South and Midwest by 4.2% and 3.1% respectively, and remained unchanged in the Northeast. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 70.6 to an all-time low of 67.3 in February. This decline suggests elevated home prices and higher mortgage rates continue to constrain affordability. On a year-over-year basis, pending sales were 9.9% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Receded in March2025-04-24T12:16:51-05:00

Existing Home Sales Increased in February

2025-03-20T13:17:48-05:00

Existing home sales in February increased to the second highest level since March 2024, according to the National Association of Realtors (NAR). This rebound suggests buyers are slowly entering the market as inventory improves and mortgage rates decline from recent high in January. Despite rates easing, economic uncertainty may continue to constrain buyer activity. While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 4.2% to a seasonally adjusted annual rate of 4.26 million in February. On a year-over-year basis, sales were 1.2% lower than a year ago. The first-time buyer share was 31% in February, up from 28% in January and 26% from a year ago. The existing home inventory level was 1.24 million units in February, up from 1.18 million in January, and up 17.0% from a year ago. At the current sales rate, February unsold inventory sits at a 3.5-months’ supply, unchanged from last month but up from 3.0-months’ supply a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 42 days in February, up from 41 days in January and 38 days in February 2024. The February all-cash sales share was 32% of transactions, up from 29% in January but down from 33% a year ago. All-cash buyers are less affected by changes in interest rates. The February median sales price of all existing homes was $398,400, up 3.8% from last year. This marked the 20th consecutive month of year-over-year increases. The median condominium/co-op price in February was up 3.5% from a year ago at $355,100. This rate of price growth will slow as inventory increases. Existing home sales in February were mixed across the four major regions. Sales rose in the South (4.4%) and West (13.3%), fell in the Northeast (-2.0%), and remained unchanged in the Midwest. On a year-over-year basis, sales increased in the Northeast (4.2%) and Midwest (1.0%), decreased in the South (-4.0%), and were unchanged in the West. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 74.0 to an all-time low of 70.6 in January. This decline suggests elevated home prices and higher mortgage rates continue to constrain affordability. On a year-over-year basis, pending sales were 5.2% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Increased in February2025-03-20T13:17:48-05:00
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