Existing Home Sales Decline 4 Consecutive Months, Lowest Reading in 11 Months

Key Highlights

• Existing-home sales are down for the fourth consecutive month.
• The median existing-home price for all housing types saw a record year-over-year increase of 23.6% in May 2021.
• Properties typically sold in 17 days.
• First-time buyers were responsible for 31% of sales in May, also even with April but down from 34% in May 2020.
• Individual investors or second-home buyers, who account for many cash sales, purchased 17% of homes in May, even with April and up from 14% in May 2020.
• All-cash sales accounted for 23% of transactions in May, down from 25% in April and up from 17% in May 2020.
• A new study released by NAR last week – the 2021 Vacation Home Counties Report – found that from January to April 2021, the share of vacation home sales to total existing-home sales rose to 6.7%. Vacation home sales jumped 57.2% year-over-year compared to the 20% year-over-year growth in total existing-home sales.

“Home sales fell moderately in May and are now approaching pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.

“The market’s outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”

Sales and Price By Region

• Existing-home sales in the Northeast decreased 1.4% in May, but the annual rate of 720,000 is a 46.9% jump from a year ago. The median price in the Northeast was $384,300, up 17.1% from May 2020.
• Existing-home sales in the Midwest rose 1.6% to an annual rate of 1,310,000 in May, a 27.2% increase from a year ago. The median price in the Midwest was $268,500, an 18.1% increase from May 2020.
• Existing-home sales in the South declined 0.4%, posting an annual rate of 2,590,000 in May, up 47.2% from the same time one year ago. The median price in the South was $299,400, a 22.6% jump from one year ago.
• Existing-home sales in the West fell 4.1%, recording an annual rate of 1,180,000 in May, a 61.6% climb from a year ago. The median price in the West was $505,600, up 24.3% from May 2020.

Not Inflation

Home prices are not counted in inflation statistics. If they were, the Fed would see that it has exceeded its goal to overshoot its 2% target “for some time” by a mile.