WASHINGTON (AP) — Sales of previously-occupied homes fell for the fourth straight month in May as soaring prices and a limited number of available properties discouraged many would-be buyers.
Existing home sales dropped 0.9% last month from April to a seasonally-adjusted annual rate of 5.8 million units, the National Association of Realtors said Tuesday. The string of sales declines comes after sharp gains last fall and through the winter, as many Americans sought more living space during the pandemic. Sales are up nearly 45% from last May, when purchases fell to their lowest point of the COVID-19 outbreak.
The drop in sales suggests that the hot housing market is cooling a bit, even as hiring is steady and the economy is recovering rapidly from the pandemic recession. Home sales boomed last year as many Americans sought more living space during the pandemic. That lowered the number of homes available and caused prices to spike.
That increase has likely frustrated many would-be home buyers, particularly first-time buyers, and led them to postpone a home purchase. The median sales price topped $350,000 last month, the NAR said, a record high.
Prices rose so quickly that by May, roughly half of all homes sold were purchased for more than their asking price, according to real estate brokerage Redfin. Two years earlier, before the pandemic, just one-quarter of sales were above the asking price.
Historically low mortgage rates have helped fuel sales by making monthly payments more affordable. The average interest rate on a 30-year mortgage fell to 2.93% last week, according to mortgage buyer Freddie Mac.