Existing-Home Sales Fell 3.4% in May
Summary
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. "Home sales have essentially returned to the levels seen in 2019 — prior to the pandemic — after two years of gangbuster performance," said NAR Chief Economist Lawrence Yun. "Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions." "Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties — placing additional financial strain on prospective first-time homebuyers," said NAR President Leslie Rouda Smith, a Realtor from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. "To counter this trend, policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers."
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