US existing-home sales rise to highest level this year in May

Existing-home sales in the US rose to their highest level this year in May, exceeding market expectations and signaling some improvement in the country's subdued housing market.

Sales of previously owned homes increased 3.2% in May from the previous month to a seasonally adjusted annual rate of 4.17 million, according to data released Tuesday by the National Association of Realtors (NAR).

The reading surpassed market forecasts, pointing to a smaller increase, and marking the strongest sales pace since December.

"More Americans are on the move, with home sales rising to the highest level since December," NAR Chief Economist Lawrence Yun said in a statement. "This is great news for the housing market and the economy."

The figures suggested a partial thaw in the US resale housing market, which has remained near an annual pace of around 4 million for roughly three years amid elevated mortgage rates and affordability pressures.

Although mortgage rates have climbed in recent months to above 6.5%, they remain lower than their levels a year earlier.

"Improving affordability is helping drive this momentum," Yun said.

The median existing-home sales price rose 1.3% from a year earlier to $429,300 in May, NAR data showed.

Housing inventory also improved, rising slightly from a year ago to 1.55 million units, the highest level since July. At the current sales pace, available inventory represented 4.5 months of supply.

First-time buyers accounted for 35% of sales in May, up from 33% in April and 30% in the same month last year.

Regionally, sales increased in the South, Northeast and Midwest from the previous month, while they were unchanged in the West. In the Midwest, transactions reached an annualized rate of 1 million, the highest since April 2023.