The average price of an existing home sold in May rose to a record $407,600 in May, the National Association of Realtors said on Tuesday.
The median home price exceeded $400,000 for the first time. Compared to last year, the average selling price increased by 14.8%.
The median price of an existing single-family home was $414,200 in May, up 14.6% from May 2021.
Prices continue to rise as the country grapples with inflation and a shortage of homes for sale. Rising mortgage rates, which rose sharply this year as the Fed raised interest rates to fight inflation, have taken a serious toll on the affordability of homes.
New buyers accounted for 27% of sales in May, compared to 28% in April and 31% in May 2021.
Existing home sales fell 3.4 percent year-on-year to 5.41 million in May, according to NAR. Compared to last year, sales fell 8.6 percent.
“The decline in home purchases means more people are renting, and the resulting increase in rents could push more institutional investors to buy single-family homes and convert them into rental properties, putting additional financial stress on potential home buyers. ,” said NAR President Leslie. Ruda Smith is Assistant Broker at Plano, Texas Realtor® and Dave Perry-Miller Real Estate in Dallas. “To counter this trend, policymakers should consider encouraging the release of stocks in the market by temporarily reducing capital gains taxes for ordinary investors to sell to new buyers.”
This is the fourth consecutive monthly decline in home sales. Sales are likely to decline further, according to anticipated home sales data. Existing home sales are counted at closing, and pending sales are signatures that appear on existing home sales two to three months later.
At the start of the year, the average rate on a 30-year fixed mortgage in the US was 3.11%. In March and April, when most of the closings counted in the May numbers were signed, the rates approached 5 percent from 4.17 percent. Now they’re over six percent.
“Sales should be expected to decline further in the coming months due to affordability concerns due to the sharp rise in mortgage rates,” said Lawrence Yun, NAR chief economist. “However, home prices are selling fast, and inventory levels still need to rise significantly — nearly double — to soften home price increases and give buyers more choice.”
In May, the number of houses in the market increased by 12.6% to 1.16 million units. Despite the increase, it was 4.1 percent lower than last year’s level.
On average, homes were on the market for just 16 days, the fastest on record, missing a day in April.
“Home sales are almost back to pre-pandemic levels seen in 2019, after two years of hype,” Yoon said. Said. “Furthermore, market movements for single-family homes and condominium sales are nearly equal, which could mean that residential preference in the suburbs of urban life that has existed in the past two years lacks a pre-pandemic return. must. “
Source: Breitbart
