• Existing-home sales rose 0.2% in May, according to the NAR. Sales were down by over 20% from a year earlier. 
• The median sale price of an existing home continues to decline, down over 3% on a year-over-year basis.
• The inventory of existing homes for sale increased somewhat in May.

Sales of existing homes rose 0.2% in May from April to 4.30 million at a seasonally-adjusted annualized rate, according to the National Association of Realtors. Sales were mixed in the four census regions with increases in the South and West and declines in the Northeast and Midwest. Total existing-home sales plunged 20.4% in May from a year ago. 

The median sale price of an existing home was $396,100 in May, down over 3% from a year earlier. But although prices are falling nationally, they were up in the Northeast and Midwest, while they were down in the South and West. 

The inventory of existing homes for sale rose 3.8% in May from the prior month but fell 6.1% from a year earlier. May’s inventory was equivalent to 3.0 months at the existing sales pace, up from 2.9 months in April and 2.6 months in May 2022. 

Existing home sales are up 6.7% this year but inventory remains very tight. Existing-home sales historically made up about 90% of total home sales but given rising mortgage rates in the past year, existing-home sales have made up a much lower percentage of total sales. Existing homeowners with very low mortgage rates have strong incentives to stay put, resulting in a greater demand-supply imbalance in the housing market. Looking ahead, demand will likely remain challenged by elevated mortgage rates although solid demographic dynamics and good consumer balance sheets are positives. New construction should improve through 2023 as the labor market softens and inflation settles. PNC Economics expects the housing market to remain weak in the near term as interest rates remain elevated and the U.S. economy weakens.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance, and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.