Sales of previously owned homes saw a modest 0.8% increase in May, but overall, the housing market remains weak due to high mortgage rates and economic uncertainty. The median home price rose to a new record of $422,800. Existing-home sales saw regional variations, improving in the Northeast, Midwest, and South yet declining in the West. Inventory increased substantially, with 1.54 million unsold homes available, the highest since 2016, indicating a growing selection for buyers, although mortgage rates remain a significant barrier to market participation.
The relatively subdued sales are largely due to persistently high mortgage rates, which have impacted buyer and seller participation in the housing market.
Lower interest rates will attract more buyers and sellers to the housing market, increasing the mobility of the workforce and driving economic growth.
The supply of existing homes for sale continued to expand, offering more options for home shoppers who can afford the current rates.
At the current sales pace, May existing-home inventory represented a supply of 4.6 months, indicating the highest level of inventory since 2016.
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