Existing-home sales fell for a fourth straight month in May as prices grew by the most on record.
The number of contracts closed slipped 0.9% in May to a seasonally adjusted annual rate of 5.8 million from 5.85 million in April, according to the National Association of Realtors. Analysts surveyed by Refintiv had expected 5.72 million contracts closed.
"Home sales fell moderately in May and are now approaching pre-pandemic activity," said Lawrence Yun, NAR's chief economist. "Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.
The decline in contracts closed came as the median existing-home price surged by a record 23.6% year over year to $350,300. Prices have posted 111 straight months of year-over-year gains since March 2011.
Total housing inventory at the end of May was 1.23 million units, 7% from April. Still, that was 20.6% below the 1.55 million homes available a year ago. Unsold inventory ticked up to 2.5 months, but remained far below the 4.6-month supply that was seen in May 2020.
Homes remained on the market for an average of 17 days in May, unchanged from April but down 34% year over year.
For the second straight month sales were only higher in the Midwest, where they rose 1.6%. They fell 4.1% in the West, 0.4% in the South and 1.4% in the Northeast. On an annual basis, sales increased 27.2% in the Midwest, 46.9% in the Northeast, 47.2% in the South and 61.6% in the West.