Existing home sales rose but flounder at low levels. Rising inventory will eventually impact prices.
The NAR reports Existing-Home Sales Increase 0.8% in May
Six Key Highlights
- Existing-home sales rose 0.8 percent in May to a seasonally adjusted annual rate of 4.03 million.
- Sales are down 0.7 percent from one year ago.
- The median existing-home sales price climbed 1.3 percent from May 2024 to $422,800, an all-time high for the month of May and the 23st consecutive month of year-over-year price increases.
- The inventory of unsold existing homes jumped 6.2 percent from the previous month to 1.54 million at the end of May
- Supply is 4.6 months at the current monthly sales pace.
- Sales are down 36.4 percent from the cycle high of 6.34 million in January of 2022.
NAR Chief Economist, Lawrence Yun, notes “”The relatively subdued sales are largely due to persistently high mortgage rates. Lower interest rates will attract more buyers and sellers to the housing market. Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs.”
These cheerleaders never discuss recession.
Factor in mortgage rates near 7 percent, a slowing economy, and massive tariff uncertainty. Housing is going nowhere until prices collapse and mortgage rates come down.
Yun cannot say that, so he sings the same happy tune for years.
The best thing the NAR has going for it is rising inventory that will eventually pressure prices. But homes are light years away from being affordable.
Existing-Home Sales Percent Change from Month Ago
Existing-Home Sales Percent Change from Year Ago
Year-over-year comparisons are now pretty easy so we may see more meanderings above the zero line if sales hold at these levels and especially if they advance.
Existing-Home Sales Supply
Data that is allegedly seasonally adjusted sure does not look like it.
Regardless inventory is building and that will eventually pressure prices and likely is already.
Median sales price is not the best metric. Case-Shiller home prices, a measure of repeat sales over time, is the best measure but it lags by about 4 months. Case-Shiller reports tomorrow.
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-10% on oil deserves a comment.
https://babylonbee.com/news/obama-distraught-as-trump-bombs-cool-nuke-factory-he-paid-for/
Being a retired Wall Street trader for 30 years, it was obvious oil was going down and stocks up. I said that Sunday, but that comment was heavily downvoted. ( see: “Derivatives Suggest $80 WTI Oil when Futures Open, then What?” ).
If you want to be a successful investor, you have to put your political stripes and your emotions on the side, or you will lose money.
Funny that I was banned over at WolfStreet for correctly calling the huge housing market rally before the pandemic. They jeered me for that prediction, then banned me after it came true.
You were Richtered. All too common over there. Smart guy but doesn’t care for dissenting opinions very well.
We both swam in the same ocean then. 🙂
Buy on the rumor. Sell on the fact.
Blasphemer!
Wolf is an arrogant know-it-all. I find his “millions of vacant houses poised to come on the market” theory to be delusional. He’s brought it up many times, probably to give hope to his readers who missed out on buying before prices skyrocketed.
Someone just asked Wolf: “I’d be interested in a post on the 10 big cities with the biggest price increases, too.”
His answer: “The promo clickbait media, paid for by the real-estate industry, including the WSJ and social media, are filled to the rafters with this toxic real-estate hype propaganda. THEY are a big part of the cause of the disastrous housing unaffordability.”
We are in the same boat, he banned me for stating that tariffs are paid by the importer and then the consumer. Somehow the guy clings to the bizarre editorial position that Tariffs are paid by the country of origin.
I have given up posting there for most things. He did erase a bunch of my posts but for some reason I can still rarely post.
He has predicted 25 of the one housing bust.
The only places in the country where housing prices are falling are areas where supply is increasing relative to demand – like Texas.
There remains a persistent shortage of houses and apartments in New Jersey, Connecticut, RI & Mass to name a few in my neck of the woods. House prices still going up double digits and rents went sky high over the last 5 years in these states.
Let the south announce to everyone who will listen that they are the best.
High inventory levels are mostly in pandemic locations because people are selling since ‘Work From Home’ is over. They are buying in job cities like Boston, Seattle LA, NYC, and Chiago so they can work in the office.
The price gains in job cities are offsetting price losses in pandemic locations. Furthermore job cities still have historically low inventory levels.
Bottom line: Nothing to see here!
“Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth.”
This is a funny statement. Buying a home ties you to a location and therefore you are less mobile. Also not sure how buying homes drives economic growth unless he means new houses.
No Home, No Retirement, No Kids: How Gen Z-ers See Their Future
https://archive.ph/ytKRa
I was trying to figure out if the fear of nuclear death we had when I was that age was worse… but then I realized that they are going to have that too, soon, probably when a city goes up in a mushroom cloud.
We’re about to hit a 20 year patch of barely educated nihilists. Only one thing you can do with those… make them into cops and soldiers.
“These cheerleaders never discuss recession. Factor in mortgage rates near 7 percent, a slowing economy, and massive tariff uncertainty. Housing is going nowhere until prices collapse and mortgage rates come down.”
I agree 100%, Mish. Unfortunately, the median price is only down $4,100 from May of 2024. That’s far from a crash, but eventually, it will arrive.
Median is not down.
The median price of an existing home sold in May was $422,800, up 1.3% year over year. That’s a record high for the month of May.
The NAR graphic that I looked at must have shown $426,900 as being from June of last year. Still no broad-based declines.
My bad.
Lower prices? But that would lower their commissions!
I’m considering buying, but I’m using my own network of acquaintances. I will not pay a realtor, and I will not buy from somebody that does.
Realtors are as relevant as travel agents.
I resemble that remark.
My wife is a realtor.
resemble?
A common wording, surprised that eludes anyone’s knowledge base here. Think about the word resemble, as used there. *click*
It helps if you visualize a man with black bushy mustache and eyebrows saying it as he waggles a cigar.
I thought you meant “resent” and made a typo. So you wanted to say “I resemble that click. My wife is a realtor.” Everything is clear now. I understand you perfectly.
I don’t know why anyone would use a realtor to sell their home. We sold our home with no realtor AND we didn’t advertise. I sent a few emails. We got a written offer for more than we ever expected.
To be fair, I think there are a LOT of people out there that are just incapable of managing that bit of paperwork.
50k for that work is comical though.
Whom did you send the emails to? Please be specific. Glad you got an offer for more than you expected. I would like to do what you did, if you could give me step by step instructions on how to sell my property.
Thanks!