Existing-home sales in the US accelerated to their fastest pace of the year in May, providing a dose of optimism after a tepid start of the spring selling season.
Contract closings rose 3.2% to an annualized rate of 4.17 million last month, according to data released Tuesday by the National Association of Realtors. That exceeded all estimates in a Bloomberg survey.
"More Americans are on the move, with home sales rising to the highest level since December," Lawrence Yun, NAR's chief economist, said in a statement. "This is great news for the housing market and the economy."
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The figures point to some thawing in the nation's home resale market, which has been stuck around a 4 million annual pace for about three years. Pending sales have increased this year and the improvement is now showing in contract closings. Sellers are giving up some ground on price and "meeting buyers where they are," Realtor.com said
Although mortgage rates have risen in the past couple of months to top 6.5%, they remain below their levels from a year ago, and that improved affordability has helped build momentum, Yun said.
"Certainly, if the mortgage rate was to retreat back down toward 6%, then one can feel comfortable that sales would be rising," he added in a call with reporters Tuesday. But with uncertainty related to oil prices and inflationary pressures, "we have to wait and see."
In May, the median sales price of an existing home climbed 1.3% from a year ago to $429,300, NAR data show. Meantime, inventory rose slightly from a year ago to 1.55 million, the highest since July and representing 4.5 months of supply at the current sales pace.
Sales rose in the South, Northeast and Midwest from a month earlier, while they were unchanged in the West. In the Midwest, transactions reached 1 million, the highest pace since April 2023.
First-time buyers are returning to the market, accounting for 35% of sales in May, which is the highest share since June 2020, Yun said. Investors, meantime, account for a falling share.
