This is a bit of a pickle here for the housing market.
Home prices are at an all-time high; meanwhile, pre-owned home sales are at a 30-year low. Add to that the ~7% mortgage rate and we've got ourselves a market which few want to touch. Luckily, we're starting to see a bit of a jump in inventory which should quell these price increases a bit in the future.
Yeah, uhh, not a good look for the "best economy ever."
Sales of previously owned homes are sitting at a 30-year low and didn't move much in May as prices hit a new record and mortgage rates remain high.
So-called existing home sales in May were essentially flat, down 0.7% from April to a seasonally adjusted, annualized rate of 4.11 million units, according to the National Association of Realtors, or NAR. Sales fell 2.8% from May of last year ...
The median price of an existing home sold in May was $419,300, a record-high price in the Realtors' recording and up 5.8% year over year. The gain was the strongest since October 2022. Prices gained in all regions.
The Realtors noted in a release that the mortgage payment for a typical home today is more than double what it was five years ago.
Lawrence Yun, chief economist at the National Association of Realtors, says that, like the rest of us, he envisioned a recovery in home sales in the spring, but they "refuse to recover."
And do you guys remember that rumor that rates were gonna be cut at the Fed at the beginning of this year? Yeah, I guess that's why they call it a rumor. Mortgage rates remain strong at around 7%.
The average rate on the popular 30-year fixed loan started the month just below 7% and then rose to just over 7.5% by mid-April, before settling back slightly in May, according to Mortgage News Daily. That rate is now right around 7% …
Not only have rates climbed, but home prices are more than 50% higher than they were five years ago.
Best economy ever!
Maybe someday that inflation rate will drop below the Fed's 2% target and we can see that rate come down. Don't hold your breath.
I'm gonna throw some good news in here so we don't get too depressed.
The biggest change in May is that the inventory of homes for sale jumped, up 6.7% month to month and 18.5% higher than in May last year. At the current sales pace, there is now a 3.7-month supply. While inventory is gaining, it is still very low given demographics and demand.
'Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months. Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions,' Yun added.
So it's not all bad, people. It's not all bad.
We're at peak real estate season as we speak, folks, so look for this doom and gloom to perk up a little bit before we get to fall.
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