U.S. Existing-Home Sale Prices Hit Record of $407,600 in May

The median existing-home sale price in the U.S. shot above $400,000 in May, setting a new record, as the housing market stalled under the weight of higher mortgage-interest rates.

Sales of previously owned homes slid for a fourth straight month, declining 3.4% in May from the prior month to a seasonally adjusted annual rate of 5.41 million..

the weakest rate since June 2020, the National Association of Realtors said Tuesday. May sales fell 8.6% from a year earlier.

Home-buying demand continues to exceed supply, buoying home prices to new highs. The median existing-home price rose 14.8% in May from a year earlier to $407,600, a record high in data going back to 1999, NAR said.

“The impact of higher mortgage rates have not been fully reflected in the data,” said Lawrence Yun, NAR’s chief economist. “In the upcoming months, I do anticipate a further decline in home sales.”

Economists surveyed by The Wall Street Journal had expected a 3.6% monthly decline in sales of previously owned homes, which make up most of the housing market.

The average rate on a 30-year fixed-rate mortgage was 5.78% in the week ended Thursday, the highest level since 2008 and up from 2.93% a year earlier, according to housing-finance agency Freddie Mac.

Mortgage applications to purchase homes have declined in response to rising rates. Two real-estate brokerage companies said last week they would lay off hundreds of employees due to decreased home-buying demand.

The inventory of homes for sale has risen sharply in some markets. In the Austin, Texas, metro area, active listings in May surged 146% from the prior year, according to the Austin Board of Realtors.

In the Denver area, active listings climbed 76% year-over-year in May, according to the Denver Metro Association of Realtors.

Nationally, there were 1.16 million homes for sale or under contract at the end of May, up 12.6% from April and down 4.1% from May 2021, NAR said. At the current sales pace, there was a 2.6-month supply of homes on the market at the end of May.