US Home Sales Drop for Third Consecutive Month in May Amid Record Prices

Existing-home sales in the United States declined by 0.7% in May, reaching a seasonally adjusted annual rate of 4.11 million, as reported by the National Association of Realtors (NAR). This marks the third consecutive month of decreasing sales. The decline was driven entirely by a drop in sales in the South, while other regions such as the Northeast, Midwest, and West saw no change. Year-over-year, sales fell by 2.8%.

Despite the decline in sales, the median sales price of existing homes rose to a record high of $419,300, representing a 5.8% increase from the previous year. The inventory of unsold existing homes also increased by 6.7% month-over-month, reaching 1.28 million units by the end of May. Mortgage rates have surged to a 23-year high of 7.79%, with the Federal Reserve maintaining its short-term rate at its highest level in over two decades. These high mortgage rates are contributing to the slowdown in sales, as many homeowners with fixed-rate mortgages below 3% are reluctant to sell.