U.S. existing-home sales rebound in May, prices hit record high

A spring housing rebound finally showed up in the numbers, but it did not erase the market’s central contradiction: buyers are returning even as mortgage rates and prices remain painful. Existing-home sales rose 3.2% in May to a seasonally adjusted annual rate of 4.17 million, the fastest pace since December and above economists’ expectations, yet the market is still running far below the roughly 5.2 million pace that was once typical.

The price data underlined how strained the market remains. The median existing-home price climbed 1.3% from a year earlier to $429,300, a record for any May in National Association of Realtors data going back to 1999. Inventory also improved only modestly, rising to 1.55 million homes, up 3.3% from April and 0.6% from a year earlier. At that level, supply amounted to 4.5 months, which is generally considered balanced rather than deeply favorable to either buyers or sellers.

Lawrence Yun, the National Association of Realtors’ chief economist, said improving affordability in some regions was helping demand, but he warned that mortgage-rate swings and oil-price uncertainty could still derail the recovery. That caution fits the broader picture. Homes spent a median 29 days on the market in May, down from 32 in April, suggesting buyers moved faster, but not in a way that points to a full-blown normalization.

The recovery was also uneven by region. Sales rose in the Midwest, South and West, but fell in the Northeast, reinforcing that the rebound is not yet broad-based nationwide. First-time buyers accounted for 35% of purchases, the highest share in nearly six years and the strongest since June 2020. That is a sign that some entry-level buyers are finding a way back in, but it also highlights how selective this market has become, with the strongest demand likely coming from cash-rich, higher-income or otherwise rate-insulated buyers who can absorb record prices.

For the housing market, May’s data point to a narrow improvement rather than a clean reset. The sales pace beat forecasts, inventory crept higher and first-time buyers reappeared, but the combination of high prices, still-tight supply and mortgage-rate pressure means the rebound may be less a sign of broad housing strength than of a market that remains increasingly inaccessible to many would-be buyers.