April's
Total home sales rose 3.8% month over month in May to 308,446. That's the highest level since October 2022, driven by a 2.8% jump in existing-home sales, which also reached their highest level since October 2022, according to Redfin.
Meanwhile, pending home sales, a more current market indicator, were essentially flat at 0.1% growth month over month.
The 30-year fixed-rate mortgage declined for three consecutive weeks in April, dropping from 6.46% to 6.23%, according to Freddie Mac. But the rate relief halted in May, as the 30-year rate climbed back up to 6.53%, the
Economic and global uncertainty also pushed away potential buyers, especially due to the ongoing Iran war and closure of the Strait of Hormuz,
This has resulted in the market heavily favoring buyers, as there were hundreds of thousands more home sellers than buyers, giving buyers more negotiating power for price reductions and seller concessions. Still, 59.8% of homes that sold in May went for less than the original asking price, a slightly smaller share than the month prior and the sixth straight month in which that share has declined, the report found.
Discounts were less common because sellers priced their homes more realistically from the start, as the median price for new listings in May decreased 0.1% month over month. Home sale price increased 2% on an annual basis to $398,771, according to the report.
New listings of homes for sale in the United States also rose 1.4% monthly to their highest level since 2022, coming as a result of improved buyer demand. The number of homes for sale inched up 0.4% from April to their highest mark since 2020, while total inventory hit a six-year high as well due to stale listings sitting on the market following a slow start to the year, in addition to new sellers, the report showed.
Increased inventory was another reason home sales hit a near-four-year high, as buyers had more options.
Which housing markets were hot?
The Bay Area was a major contributor to the national increase in home sales. San Jose, California, saw a 25.7% spike in sales year over year last month, while they surged 19.3% in San Francisco. The AI boom drove fierce homebuying demand in the area.
South Florida also contributed, as home sales rose 18.3% in West Palm Beach, Florida, a market typically supported by luxury buyers undeterred by high prices and economic uncertainty, Redfin said.
Meanwhile, home sales fell most in Detroit, by 14%, New York, by 9.1%, and Providence, Rhode Island, by 8.4%.
Of the 50 most populous metro areas in the United States, San Francisco also led the country with a 10.9% annual increase in sale price, followed by St. Louis and Pittsburgh. Prices fell the most in San Jose, by 5.6%, according to the report.
