Existing US home sales dip in May, but prices at record highs

Sales of second hand homes in the US dipped just as expected last month, albeit alongside a fresh record high in prices.

According to the National Association of Realtors, in seasonally adjusted terms existing home sales declined by 0.7% month-on-month in May to reach an annual rate of 4.11m.

Economists had pencilled-in an increase to 4.1m.

The median price of an existing home jumped by 5.8% versus one year before to reach $419,300, for the highest ever price and strongest annual rate of increase since October 2022.

That was faster than the 5.4% clip observed in April.

Sales fell by 1.6% month-on-month in the South, but were unchanged in the Northeast, Midwest and West.

Unsold existing homes meanwhile increased by 6.7% on the month to reach 1.28m.

That amount was worth 3.7 months of sales at the current pace, versus 3.5 months' worth of sales in April and 3.1 months 12 months back.

"Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months," commented NAR chief economist Lawrence Yun.

"Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions."

Nancy Vanden Houten at Oxford Economics added: "Increases in inventory should temper future gains in home prices, although with supply still relatively tight, we expect home price growth to remain positive, slowing to about 3.5% to 4% by the end of the year."

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