May saw record-high home prices, but sales slowed down.

• The number of homes available for purchase increased in May, rising by 6.7% compared to the previous month and 18.5% from the same month the previous year.
• In May, the median price of an existing home sold reached a record-high of $419,300, a 5.8% increase from the previous year.

Previously owned home sales are at a 30-year low, with little movement in May as prices reached a new record and mortgage rates remain high.

In May, existing home sales were essentially flat, with a seasonally adjusted, annualized rate of 4.11 million units, down 0.7% from April, according to the National Association of Realtors (NAR). Additionally, sales fell 2.8% from May of the previous year.

The sluggish sales pace was due to a significant increase in rates in April.

The rate on the widely used 30-year fixed loan began the month at approximately 6.99% and subsequently increased to 7.51% by the end of April. However, it decreased slightly in May, and currently stands at around 7%.

"According to Lawrence Yun, the chief economist at the NAR, home sales are not recovering, despite his initial belief that they would this spring."

In all regions except the South, sales remained constant month to month. However, in the South, there was a 1.6% decline in sales.

In May, the number of homes for sale increased by 6.7% compared to the previous month and was 18.5% higher than in May of the previous year. With the current sales pace, there is now a 3.7-month supply of homes available. Despite the increase in inventory, it remains low due to demographics and demand.

As Yun stated, more inventory will aid in increasing home sales and controlling home price growth in the near future. An increase in housing supply will benefit consumers by providing them with more options before making a purchase decision.

Record prices

The demand for homes continues to drive up prices, with the median price of an existing home sold in May reaching a record-high of $419,300, a 5.8% increase from the previous year. This gain was the strongest since October 2022, and prices rose in all regions.

The median home price has increased by more than 50% in the past five years, resulting in a mortgage payment that is now more than double the amount from five years ago. This is due to both rising interest rates and the increase in home prices.

The sales of homes priced below $250,000 decreased compared to the previous year, while sales priced between $250,000 and $500,000 saw only a slight increase of 1%. Sales priced between $750,000 and $1 million experienced a 13% rise, and sales priced above $1 million saw a nearly 23% increase.

Despite the rise of alternative payment methods, cash remains the most popular form of payment, accounting for 28% of sales. First-time buyers continue to make up a significant portion of sales, increasing to 31% from 28% the previous year.

Despite higher prices, competition remains strong as two-thirds of homes went under contract in less than a month. Redfin reports that an increasing number of listings are becoming stale, meaning that if a home is well-priced and doesn't require much work, it sells quickly. However, other homes are sitting longer.