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Median existing-home sales prices set records in May, climbing 5.8% year over year to reach $419,300. This is the 11th consecutive month of price gains, according to the National Association of Realtors (NAR). Moreover, every sales region in the country recorded price gains and we generally see increased prices, activity and inventory.

While these record-setting prices are a boon to home sellers, they are creating a divide between those owning homes and those who are dreaming of entering the housing market. According to Lawrence Yun, chief economist for NAR, typical mortgage payments are currently more than double that of homes purchased prior to 2020, yet despite the challenges, “first-time buyers in the market understand the long-term benefits of owning.”

Decline in Sales
Price gains might have kept some buyers on the sidelines of the market, as existing-home sales declined by 0.7% in May. Month-over-month sales were unchanged in most markets but were down in the South. Year-over-year sales, meanwhile, climbed in the Midwest but retreated in the Northeast, South, and West.

Growing Inventory
By the end of May, total housing inventory climbed 6.7% month over month. With 1.28 million units available for sale, this level of housing stock would supply the market for 3.7 months. Inventory levels have improved significantly from a year ago, increasing 18.5% from a low supply of 1.08 million homes. This increase in inventory is a positive development for a housing market that has been hampered by low supply for years. “Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” according to Yun.

Buyer Demographics
According to the monthly Realtors Confidence Index, the average property was available for sale for 24 days in May, down from 26 days a month ago but up from 18 days a year ago. First-time buyers accounted for a fair share of those purchases, representing 31% of all buyers in May—down from 33% in April but up from 28% in May 2023. All-cash sales, meanwhile, accounted for 28% of all transactions, unchanged from a month ago and up from 25% a year ago. Individual investors and second-home buyers, who account for many all-cash sales, represented 16% of the buying public, unchanged from April and up from 15% in May 2023. Distressed sales, including foreclosures and short sales, continued to hold steady at 2% of all purchases.

Regional Sales Breakdown

• Northeast: Existing-home sales annual rate of 480,000; unchanged from April 2024 but a decrease of 4% from May 2023. The median sales price of $479,200 represented a 9.2% increase from May 2023.

• Midwest: Existing-home sales annual rate of 1 million; unchanged from April 2024 but an increase of 1% from May 2023. The median sales price of $317,100 represented a 6.4% increase from May 2023.

• South: Existing-home sales annual rate of 1.87 million; a decrease of 1.6% from April 2024 and 5.1% from May 2023. The median sales price of $374,300 represented a 3.6% increase from May 2023.

• West: Existing-home sales annual rate of 760,000; unchanged from April 2024 but a decrease of 1.3% from May 2023. The median sales price of $632,900 represented a 5.5% increase from May 2023.

Increased Prices, Activity and Inventory