Sales of previously owned homes fall to an almost two-year low

Abstract

Sales of previously owned U.S. homes fell for a fourth month in May, receding to the lowest level in nearly two years and underscoring how high prices and a surge in mortgage rates have stifled demand. "Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year," Lawrence Yun, NAR's chief economist, said in a statement. "Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially - almost doubling - to cool home price appreciation and provide more options for home buyers."The number of homes for sale fell from a year ago, to 1.16 million. At the current sales pace it would take 2.6 months to sell all the homes on the market. While historically low, that marked the fourth straight month of improvement in the months supply. First-time buyers accounted for 27% of U.S. sales last month, down from 31% a year ago, and underscoring the affordability challenges that have been pricing many Americans out of the market. Cash sales represented 25% of all transactions in May, up from 23% in the same month last year.