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Sales of previously owned homes in the United States recorded their strongest monthly performance in five months, signalling a recovery in buyer activity after a subdued start to the spring housing season. According to the National Association of Realtors (NAR), existing home sales increased by 3.2 per cent month-on-month in May to a seasonally adjusted annual rate of 4.17 million units, surpassing market expectations and registering a similar increase compared with the same period last year. The improvement was supported by stronger activity across the Midwest, South and West regions, although sales declined in the Northeast. Home prices continued their upward trajectory, with the median sales price reaching USD 429,300. Despite the recent gains, the US housing market remains below historical sales levels and continues to grapple with the effects of elevated mortgage rates.
The United States housing market posted its strongest sales performance since December, with sales of previously occupied homes rising in May despite continued pressure from elevated mortgage rates. Data released by the National Association of Realtors (NAR) in the past week showed existing home sales increased by 3.2 per cent from April to a seasonally adjusted annual rate of 4.17 million units, exceeding economists’ expectations and marking an improvement from the same month last year.
The latest figures indicate a notable recovery in housing demand following a slow start to the spring homebuying season. Economists surveyed by FactSet had anticipated an annual sales pace of approximately 4.07 million units, making May’s performance stronger than forecast.
On a year-on-year basis, existing home sales also rose 3.2 per cent. Regional trends, however, remained mixed. NAR reported that sales activity increased across the Midwest, South and West regions compared with May last year, while the Northeast recorded a decline.
Although the latest reading represents an improvement, overall housing transactions remain well below long-term averages. Existing home sales have largely hovered around an annual pace of 4 million units since 2023, considerably lower than the historical norm of roughly 5.2 million units annually.
The increase in transactions came despite mortgage rates continuing to trend higher through much of the spring season. While borrowing costs remain elevated compared with pandemic-era levels, mortgage rates are still lower than they were a year ago, providing some support to housing demand.
Property values also continued to strengthen across the country. The median sales price of an existing home reached USD 429,300 in May, representing a 1.3 per cent increase from the corresponding period last year. According to NAR data, this marked the 35th consecutive month of annual home price growth, underlining the resilience of housing values despite slower transaction volumes.
The US residential property market has faced significant challenges since 2022, when mortgage rates began rising sharply from the record lows witnessed during the pandemic period. Higher financing costs have reduced affordability for many buyers and contributed to a prolonged slowdown in housing activity.
Last year, sales of previously owned homes remained largely unchanged and ended at their lowest level in three decades. Market conditions have continued to remain subdued in 2026, with sales declining on an annual basis during the first three months of the year before stabilising in April and strengthening in May.
The latest data suggests that while affordability challenges persist, buyer demand has shown signs of resilience, helping the market record its strongest monthly sales pace in five months.
Source - PTI
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