Home buyers can expect to pay more than ever this summer, as the median existing-home price for all housing types hit an all-time high of $264,800 in May according to the National Association of Realtors.
Rising values are being driven by demand from a flood of buyers in the face of a shortage of inventory. This is prompting prices to rise while also limiting sales, the NAR said. For the second straight months, existing home sales fell in what is traditionally one of the busiest periods of the year.
Total housing inventory at the end of May rose 2.8 percent to 1.85 million existing homes available for sale. Still, the number of homes for sale is 6.1 percent lower than a year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, the NAR said.
Total existing-home sales, which include single-family homes, townhomes, condos and co-ops, fell by 0.4 percent in May to a seasonally adjusted rate of 5.43 million, the NAR said. That means sales are three percent less than one year ago.
“Inventory coming onto the market during this year’s spring buying season was not even close to being enough to satisfy demand,” Lawrence Yun, the NAR’s chief economist, said in a statement. “That is why home prices keep outpacing incomes and listings are going under contract in less than a month—and much faster—in many parts of the country.”
Closings declined in every major U.S. region and were down in most states, Yun said.
“Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market,” the economist added.