Inventory Rises—A Relief for Tight Supply Conditions?
Inventory saw notable improvement, with total housing stock rising 6.2% from April to 1.54 million units, a 20.3% increase from last year. This equates to a 4.6-month supply, up from 4.4 months in April and 3.8 months in May 2024. While still below pre-pandemic norms, the increase offers some relief for buyers facing tight options.
Median prices, however, continue to push upward. The national median existing-home price rose 1.3% year-over-year to $422,800—a record high for the month of May. This marks the 23rd straight month of annual price gains. Regionally, the Northeast led with a 7.1% price jump to $513,300, while the South posted a slight decline of 0.7% to $367,800.
Mixed Regional and Segment Performance
Sales were regionally uneven. The West posted a 5.4% monthly drop and is now down 6.7% from a year earlier, while the Northeast and Midwest recorded monthly gains of 4.2% and 2.1%, respectively. In segment terms, single-family sales rose 1.1% month-over-month to 3.67 million, while condo/co-op sales fell 2.7% to 360,000 units.
Investor presence increased, with 17% of transactions from investors or second-home buyers—up from 15% in April. First-time buyers accounted for 30% of sales, a dip from 34% the prior month, signaling affordability challenges. Median days on market decreased to 27, from 29 in April, indicating lingering buyer competition.
Market Outlook: Cautious Bullishness Hinges on Mortgage Rates
The modest sales gain and rising inventory suggest tentative recovery potential. However, persistently high mortgage rates and elevated prices cap broader upside. Should borrowing costs ease further, NAR expects improved turnover fueled by strong job growth and healthy household incomes. For now, traders should view the housing market as cautiously bullish—with upside contingent on rate relief.
More Information in our Economic Calendar.
