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WHY
IT'S IMPORTANT
Housing affordability in the U.S. is at an all-time low. Median
home prices have scaled record highs and the 30-year
fixed-mortgage rate is hovering at around 7%. This has depressed
both demand and supply.
The number of homes for sale remains roughly 25% below
pre-pandemic levels, according to Redfin.
Home sellers are holding onto lower fixed mortage rates secured
on properties during an era of cheap debt in the face of higher
rates currently.
In May, 407,959 homes were sold. Only October 2023 (398,537) and
May 2020 (369,300) in the past decade have recorded fewer home
sales than last month, as per Redfin data.
BY THE NUMBERS
Home sales fell 1.7% month-over-month in May on a seasonally
adjusted basis and dropped 2.9% from a year earlier, while
median home sale price rose to a record high of $439,716, up
1.6% month-over-month and 5.1% year-over-year, as per Redfin.
Seasonally adjusted new listings rose 0.3% month-over-month in
May and 8.8% from a year earlier. Still, they were roughly 20%
below pre-pandemic (May 2019) levels.
KEY QUOTE
"Sales are sluggish because high homebuying costs are making
both house hunters and prospective sellers skittish. And with so
few homes for sale, buyers in some markets are getting into
bidding wars, which is helping push home prices to record
highs," said Redfin Senior Economist Elijah de la Campa.
MARKET REACTION
Homebuilder stocks surged in 2023 as tighter supply led to
higher sales. However, the rally has since lost momentum.
Pultegroup Inc is up 11.8% year-to-date, D.R. Horton Inc is down
5.61% and Lennar Corp is up 4.03%.
(Reporting by Ananta Agarwal; Editing by Sriraj Kalluvila)
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