May home sales barely move as high mortgage rates, prices, weigh on housing market

A for sale sign (AP Photo/Nam Y. Huh, File)

NEW YORK — Sales of previously occupied U.S. homes edged higher in May, as stubbornly high mortgage rates and rising prices made homebuying less affordable even as the inventory of properties on the market continued to increase.

Existing home sales rose 0.8 per cent last month from April to a seasonally adjusted annual rate of 4.03 million units, the National Association of Realtors said Monday.

Sales fell 0.7 per cent compared with May last year. The latest home sales fell topped the 3.95 million pace economists were expecting, according to FactSet.

Home prices increased on an annual basis for the 23rd consecutive month, although the rate of growth continued to slow. The national median sales price rose 1.3 per cent in May from a year earlier to $422,800, an all-time high for the month of May.

Home shoppers who can afford to buy at current mortgage rates benefited from a wider selection of properties on the market.

There were 1.54 million unsold homes at the end of last month, a 6.2 per cent increase from April, and 20.3 per cent higher than May last year, NAR said. That’s still well below the roughly two million homes for sale that was typical before the pandemic, however.

May’s month-end inventory translates to a 4.6-month supply at the current sales pace, up from a 4.4-month pace at the end of April and 3.8 months in May last year. Traditionally, a five to six month supply is considered a balanced market between buyers and sellers.

Alex Veiga, The Associated Press