• US existing home sales rose to a 4.17 million annualized rate in May, beating the consensus estimate of 4.05 million.
  • The median existing home price increased 1.3% year-over-year to $429,300, reflecting ongoing price resilience.
  • Inventory remained tight at a 4.5-month supply, sustaining a seller-favorable market despite affordability pressures.

May Sales Exceed Forecasts

Existing home sales in the US accelerated in May, reaching a seasonally adjusted annual rate of 4.17 million, according to data released Thursday. The figure surpassed economists' expectations of 4.05 million, signaling stronger-than-anticipated demand in the housing market. This marks a 3.2% increase from April, when sales had softened amid elevated mortgage rates.

The uptick in sales comes despite persistent headwinds, including mortgage rates hovering near 7% and elevated home prices. “The market is showing surprising resilience,” said one industry analyst, noting that buyers appear to be adjusting to the higher rate environment. However, affordability remains a major challenge, particularly for first-time buyers.

Prices Continue to Climb

The median existing home price rose 1.3% from a year ago to $429,300, extending a streak of annual gains. While the pace of appreciation has moderated from the double-digit increases seen during the pandemic, prices remain near historic highs. “Limited supply is keeping upward pressure on prices,” a real estate economist commented. Indeed, inventory of unsold homes stood at a 4.5-month supply at the current sales pace, below the 5-6 months typically associated with a balanced market. This tight supply continues to favor sellers, with multiple offers still common in many markets.

Regional Variations Persist

Activity varied across regions, with the South and Midwest seeing the strongest sales growth, while the Northeast and West experienced more modest gains. Price trends also diverged: some metros in the Sun Belt saw faster appreciation, while others in the West cooled slightly. “It’s a tale of two markets,” said a local realtor, highlighting the uneven impact of affordability constraints.

Outlook and Implications

Looking ahead, the trajectory of mortgage rates will be key. If rates stabilize or decline later this year, sales could gain further momentum. However, any sustained increase in rates could dampen demand. For now, the market is navigating a delicate balance between persistent demand and constrained supply. Realtors and lenders are closely watching inventory levels, which remain a critical factor for future sales and price trends.

Correction: An earlier version of this article misstated the median price. It is $429,300.