US May existing home sales eke past forecasts

22nd Jun 2023 15:12

(Sharecast News) - Sales of second hand homes in the States were little changed last month, a leading business lobby group said.

"Mortgage rates heavily influence the direction of home sales," said National Association of Realtors' chief economist Lawrence Yun.

"Relatively steady rates have led to several consecutive months of consistent home sales."

According to NAR, existing home sales edged up at a month-on-month pace of 0.2% in May, reaching an annual rate of 4.3m.

Economists had penciled in a reading of 4.25m.

And versus the year earlier month they were off by 20.4%.

Yet the inventory of unsold homes increased by 3.8% on the month to 1.08m units.

That was the equivalent of 3.0 months' worth of supply at the then current sales pace.

As an aside, NAR leaders recommended a temporary cut to the capital gains tax on investment property in order to boost inventory levels and thus sales.

The median price of an existing home was 3.1% lower versus a year before at $396,100.

"Available inventory strongly impacts home sales, too," Yun added.

"Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019."