Existing home sales dropped 9.7 percent in the United States in May, the third straight month of declines as the nation continues to cope with the economic impact of the COVID-19 pandemic.
Total existing home sales dropped to 3.91 million in May, which is 26.6 percent below May 2019 levels, according to a report released Monday by the National Association of Realtors.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist. “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”
All four regions of the country experienced declines, led by the Northeast:
- Northeast: Sales fell by 13 percent for the month and 29.9 percent from a year ago.
- Midwest: Sales were down by 10 percent for the month and 20.2 percent from a year ago.
- South: Sales dropped 8 percent for the month and 25.1 percent for the year.
- West: Sales declined 11.1 percent in May, which was 35.1 percent below May 2019.
The median existing home price for all housing types in May was $284,600, up 2.3 percent from May 2019 ($278,200), as prices increased in every region. May’s national price increase marks 99 straight months of year-over-year gains.
Total housing inventory at the end of May totaled 1.55 million units, up 6.2% from April, and down 18.8 percent from one year ago (1.91 million). Unsold inventory sits at a 4.8-month supply at the current sales pace, up from four months in April and up from the 4.3-month figure recorded in May 2019.
“New home construction needs to robustly ramp up in order to meet rising housing demand,” Yun said. “Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”