Those looking to a buy a home these days are finding that the pickings are mighty thin. That scarcity of available homes is driving house prices higher and higher, to levels not seen before.
According to a new report from the National Association of Realtors, the median sales price for an existing single-family home increased in May to $350,300, which is an all-time record high. It’s also not the first time that home prices set a record this year.
The bottom line on these rising prices is that there simply aren’t enough homes for sale to satisfy the demand, which is driving up the prices on the homes that do hit the market.
The combination of rising prices and lack of available homes is also slowing home sales down. According to the NAR report, total existing home sales, which include single-family homes, townhomes, condominiums, and co-ops, decreased by 0.9% in May.
That’s the fourth straight month that existing home sales have fallen.
“Home sales fell moderately in May and are now approaching pre-pandemic activity," NAR Chief Economist Lawrence Yun said. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”
Overall, there were 1.23 million homes for sale at the end of May, up 7% from April but down 20.6% from last year.
The homes that do hit the market are still selling quickly. According to NAR’s report, properties typically sold in 17 days in May, the same as it was in April. Additionally, 89% of the homes sold in May were on the market for less than one month.
However, Yun sees some hope on the housing horizon.
"The market's outlook, however, is encouraging," Yun said. "Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes."