FX.co ★ U.S. Existing Home Sales Decrease Roughly In Line With Estimates In May

The National Association of Realtors released a report on Friday indicating that existing home sales in the U.S. decreased roughly in line with economist projections for May.

According to the report, existing home sales fell by 0.7 percent to an annual rate of 4.11 million in May, following a 1.9 percent decrease to an annual rate of 4.14 million in the previous month. Economists had predicted a drop to a rate of 4.10 million.

The ongoing decline in existing home sales coincides with the median existing-home price reaching a record high of $419,300 in May, marking a 5.8 percent increase from $396,500 a year prior.

"Rising home prices are creating a significant gap between current property owners and prospective first-time buyers," stated Lawrence Yun, Chief Economist at NAR.

"The mortgage payment for a typical home today is more than double that of homes purchased before 2020," Yun added. "However, first-time buyers in the market recognize the long-term benefits of homeownership."

The report also highlighted that housing inventory at the end of May totaled 1.28 million units, a 6.7 percent increase from 1.20 million units in April, and an 18.5 percent rise from 1.08 million units a year earlier.

The unsold inventory represents 3.7 months of supply at the current sales pace, up from 3.5 months in April and 3.1 months in May 2022.

"Ultimately, increased inventory will aid in boosting home sales and moderating home price increases in the coming months," Yun noted. "More housing supply is good news for consumers who want a wider selection of properties before making purchasing decisions."

Additionally, the Commerce Department is scheduled to release a separate report on new home sales for May next Wednesday.

Economists are forecasting that new home sales will rise to an annual rate of 650,000 in May, up from a rate of 634,000 in April.