U.S. home sales in May fell to one of the lowest levels on record, as the price of homes hit another record high.
The nearly 408,000 homes sold in May was a 1.7% decline from April, and 2.9% drop from a year earlier, according to a report Friday from Redfin.
Home sales fell the most in Stockton, California, (down 15.4%); Buffalo, New York, (15.4%); and San Antonio, Texas (14.3%).
“Sales are sluggish because high home buying costs are making both house hunters and prospective sellers skittish,” Redfin Senior Economist Elijah de la Campa said in the report. “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.”
Only two months in the past decade have had fewer home sales: May 2020 with the pandemic tanking the housing market, and October 2023, when mortgage rates sprung to a 23-year high.
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The dip in home sales comes amid an affordability crisis. The median home sale price hit a record high in May, rising by 5.1% to $439,716. Meanwhile, the average rate on a 30-year-fixed mortgage hit 7.06% in May, up from 6.99% one month earlier and up from 6.43% one year earlier. Last month the average mortgage rate was more than double the record low during the pandemic.
Annual price appreciation was the most dramatic in Anaheim, California, rising by 17.6%, followed by Cleveland, rising by 15.1%, and Nassau County, on New York’s Long Island, rising by 14.2%.
If there’s a glimmer of hope for buyers, sluggish sales are putting pressure on more sellers to adjust prices. Nearly one of every five homes for sale faced a price cut last month.
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