The home sales slump in the U.S. continues: Last month was the slowest May for existing home sales since 2009.
Existing home sales in May fell 0.7% compared to the same month last year. Measured monthly, sales were up slightly, 0.8%, from the month before — but that marks an increase from the slowest April for existing home sales in 16 years.
National Association of Realtors Chief Economist Lawrence Yun called the sales figures "very stable, but at the sluggish sales activity level."
The key challenge is affordability, with median home prices up 52% compared to May 2019, while wages gained 30% over that period, according to Yun. Meanwhile, sales activity is running at 75% of what it was pre-COVID, Yun added.
Right before COVID, the monthly payment for a home at the median price, including the prevailing interest rate, was roughly $1,000 a month, Yun said.
"Today it's a little over $2,000. So that doubling in the monthly payment for a new set of buyers is hindering the market condition," Yun added.
One thing that has changed in recent months is inventory: The number of homes for sale is up more than 20% over a year ago. Inventory has been rising in every region of the country, with the biggest upticks in the West and South, according to Realtor.com.
That's meant a shift to a market that favors buyers more in some areas. Using inventory data to determine the number of home sellers, and a model to estimate the number of buyers, Redfin recently estimated there are 34% more sellers than buyers in the U.S. now.
The condo market is especially rough for sellers. Condo sales in May were down 10% compared to a year earlier. By Redfin's estimation, there are 83% more condo sellers than buyers in the market.
Still, home prices have continued to rise, though much more slowly than during the pandemic. The median single-family home price in May was $427,800 — up 1.3% from May 2024. For condos and co-ops, the median sales price was $371,300, up 0.7% from a year earlier.
For all housing types, the year-over-year price growth was 1.3% — the slowest price growth since June 2023.
No spring thaw
Going into the spring housing market, many hoped that the market would improve as people would finally list their homes and buyers would decide to take the plunge.
But buyers have been largely unmoved. Some would-be buyers cite concerns about possibly losing their jobs as well as about high mortgage rates, stock market volatility — and simply not knowing what the future holds.
The Federal Reserve held interest rates steady at its meeting last week, but signaled that it could cut rates later this year. The Fed's rate cuts don't necessarily bring down mortgage rates, but they can have some effect.
"If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs," Yun said in a statement.
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