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The spring of 2023 was officially a slow one for real estate as the latest existing-home sales numbers failed to build on their gains from February.
The National Association of Realtors recorded 408,000 existing-home sales in May, according to its latest report released Thursday. That would amount to an annual rate of 4.3 million after seasonal adjustment, which represents a 0.2 percent improvement from the previous month’s sales pace.
Lawrence Yun, chief economist at the National Association of Realtors
After the steep declines in sales over much of the past year-and-a-half, the latest numbers have indicated a market that’s been fairly stable since February — neither rising nor falling that much in seasonally adjusted terms. That’s partly due to the stabilization of mortgage rates in that time, NAR Chief Economist Lawrence Yun said in a statement.
“Mortgage rates heavily influence the direction of home sales,” Yun said. “Relatively steady rates have led to several consecutive months of consistent home sales.”
Still, the latest numbers do little to dig the home market out of the deep hole it’s been in compared to a typical spring. From 2015 to 2019 — the five years before the coronavirus pandemic upended the housing market — there were an average of 530,000 existing-home sales in the month of May. This year, transaction levels were 23 percent lower than that.
Some monthly momentum was building in housing markets in the South and West, with both census regions posting seasonally adjusted increases from April to May. Existing-home sales saw monthly declines in the Midwest and Northeast on a seasonally adjusted basis.
But in the 12 months leading up to May, existing-home sales plummeted in every region of the country. The South was the least affected by declining transaction levels, with a 17 percent drop year over year. But the yearlong decline in sales was deeper in the Northeast (down 21 percent), the Northeast (down 25 percent) and the West (down 26 percent).
Inventory also remained tight throughout the U.S. — and it’s putting a ceiling on home transactions in most markets.
“Available inventory strongly impacts home sales, too,” Yun said in the statement. “Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.”
