According to data released today by the National Association of Realtors (NAR), quarterly annualized home sales in May were 5.8 million, slightly higher than market expectations of 5.72 million units. The home sales data released today marked the worst performance since June 2020 and the fourth consecutive month of decline, although the decline was only 0.85% compared to the previous month.
Housing supply, according to statistics, the supply of homes for sale at the end of May was 1.23 million units, up about 7% from last month, and down 20.6% from last year. In addition, the average speed from listing to sale in May was 17 days, while 89% of homes sold were on the market for less than a month.
In terms of sold prices, the median price of a completed home reached a record high of $350,300 in May, up 23.6 percent year-over-year. And according to NAR, the median price of a manufactured home has seen year-over-year gains for 111 consecutive months since March 2012.
Lawrence Yun, NAR’s chief economist, said in a press release on his website that home sales fell moderately in May and are now approaching the level of activity seen before the new crown, that lack of inventory remains the overwhelming factor holding back home sales, and that declining affordability is only pushing some first-time homebuyers out of the market. He then added that the outlook for the housing market is encouraging because “supply is expected to improve” which will give buyers more room to choose while helping to dampen the record high prices in the manufactured housing market.
But some market participants take a different view. realtor.com senior economist George Ratiu said in an interview with CNBC that with home sales falling for the fourth straight month, sales activity in May suggests that growth could slow for the rest of 2021. He argued that interest rates and high home prices will continue to test homebuyer affordability as inflation puts pressure on consumers’ budgets and the Federal Reserve has indicated that the end of accommodative monetary policy may come sooner than expected.