The Good Brigade/Getty Photos; Illustration by Austin Courregé/Bankrate
Key takeaways
- Present-home gross sales in Could 2024 fell 0.7 p.c from April and are down by 2.8 p.c from a yr in the past, in response to the Nationwide Affiliation of Realtors.
- The nationwide median sale worth was $419,300, up 5.8 p.c from final yr and a brand new report excessive.
- Stock in Could rose to a 3.7-month provide, a 6.7 p.c enchancment over April however nonetheless low sufficient to be thought of a vendor’s market.
The housing market once more confirmed a slowdown in gross sales however an increase in costs in Could, a brand new report by the Nationwide Affiliation of Realtors (NAR) exhibits. Gross sales of present properties fell 0.7 p.c month-over-month and a pair of.8 p.c year-over-year, regardless of extra listings hitting the market. The annual tempo of house gross sales slowed in Could to 4.11 million.
Excessive mortgage charges actually contribute to the sluggish gross sales figures. Whereas charges have remained beneath the 8 p.c mark briefly seen in October 2023, they’re nonetheless round 7 p.c. The common charge on a 30-year fixed-rate mortgage was 7.03 p.c as of June 19, in response to Bankrate’s most up-to-date survey of enormous lenders. Mixed with report costs — the median house worth in Could was a brand new all-time excessive — which means affordability challenges stay daunting for homebuyers.
The destiny of the housing market within the coming months shall be dictated partly by the route of mortgage charges.
— Mark Hamrick, Bankrate Senior Financial Analyst
“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” says Mark Hamrick, Bankrate’s senior financial analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained.”
Present-home gross sales tick downward
The rely of existing-home gross sales contains all accomplished resales, together with single-family homes, condos, townhouses and co-ops. Based on NAR, the variety of gross sales nationally fell 2.8 p.c year-over-year to an annual tempo of 4.11 million transactions in Could 2024.
Regionally, Could gross sales fell probably the most within the South, down 5.1 p.c year-over-year and 1.6 p.c from April. Within the Northeast, gross sales had been down 4.0 p.c from final yr and flat month-over-month. The West noticed a 1.3 p.c drop from final yr and had been flat from the earlier month, whereas the Midwest was the one area to rise, flat from April however up 1.0 p.c from Could of final yr.
Days on market
Properties usually remained in the marketplace for twenty-four days in Could, a down barely from 36 days in April. However in Could 2023, that determine was simply 18 days. Promoting occasions are a vital measure at any time of yr, however particularly in the course of the spring promoting season.
Residence costs hit new all-time excessive
The nationwide median sale worth for present properties in Could clocked in at $419,300, up 5.8 p.c from final yr and the very best worth NAR has ever recorded. The soar marks the eleventh month in a row of year-over-year worth will increase. The earlier home-price report was set in June 2022, when the median worth hit $413,800.
Residence costs reaching new highs are making a wider divide between these proudly owning properties and people who want to be first-time patrons.
— Lawrence Yun, Chief Economist, Nationwide Affiliation of Realtors
“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” NAR Chief Economist Lawrence Yun stated in an announcement. “The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning.” First-time homebuyers made up 31 p.c of gross sales in Could, down from 33 p.c in April however up from 28 p.c in Could of final yr.
“The record high median price just underscores that homeownership is slipping further away from middle- and lower-income Americans,” stated Robert Frick, company economist with Navy Federal Credit score Union.
All 4 geographic areas skilled annual worth will increase in Could. The West continued to have the very best median worth by far at $632,900, up 5.5 p.c from a yr in the past. Within the Northeast, the median rose 9.2 p.c from a yr in the past to $479,200. The South’s median worth rose 3.6 p.c to $374,300, and the Midwest’s median rose 6.4 p.c to $317,100.
Housing stock on the rise, however nonetheless too low
Complete housing stock — the general variety of properties on the market in the marketplace — stood at 1.28 million items on the finish of Could. That’s an enchancment, up 6.7 p.c from April and a big 18.5 p.c soar from a yr in the past. Even so, it represents solely a 3.7-month provide, which continues to be in need of the 5 to 6 months usually required for a more healthy, extra balanced market.
The sharp rise in mortgage charges seen this previous fall has stored many owners from promoting, which retains present properties off the market. Those that locked in charges at 3 p.c a number of years in the past, understandably, will not be eager on transferring with present charges greater than double that. And charges might not dip considerably anytime quickly.
Nonetheless, extra stock offers housing economists a cause to carry out hope for the longer term. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions,” stated Yun. “Eventually, more inventory will help boost home sales and tame home price gains.”
