The latest sales reports have been released regarding both existing and new-home sales, with each lane moving in opposite directions. As interest rates continue to rise and with some predicting a recession is looming, these reports can help us get a sense of what the rest of the year will look like. Keep reading below to see some highlights from the reports!
Existing-Home Experience Sustained Decline
Per the latest report from the National Association of Realtors (NAR) existing-home sales dropped by 3.4% in May of 2022, marking the fourth consecutive month of declining sales. While this is not unexpected given the market activity we were seeing in the month itself, it leaves little doubt that we’ve entered a transitional market and should most likely expect further slowing. The annual adjusted rate of sales for May was 5.41 million, also equaling a drop of 8.6% in sales year-over-year.
While these declines are noteworthy, the most striking data from this report is current sales prices. For the first time ever, in May 2022 the median existing-home sales price exceeded $400k, coming in at $407,600. This marks an increase of 14.8% compared to May ’21 ($355k). This increase also represents 123 months of consecutive price increases, and an increase of approximately $16,000 from the previous month.
With prices and interest rates continuing to increase, one small benefit is growing inventory. The month of May ended with 1.16 million available units, an increase of 12.6% from the previous month, or a 2.6 month supply. Regardless of this gain, inventory still sat at 4.1% less compared to the previous year.
Double Digit Increase for New-Sales
In an unexpected move, the U.S. Census Bureau and U.S. Department of Housing and Urban Development have shared that new residential-sales experienced a 10.7% increase in May, equating to a seasonally adjusted rate of 696,000 units at the end the month. While this was a substantial increase from month to month following multiple months of slowing, it is still 5.9% below the sales rate of May 2021.
The median sales price for new residential-sales was $449,000, and the average sale registered at $511,400, representing a mild decrease and increase from the previous month, respectively.
The market continues to move in unexpected directions. As listings remain on the market for longer, this may beget additional inventory as the seller bottleneck finally opens up. Share this data with your prospective clients to build a better understanding of what the market holds.