Home sales increased in May, reaching their strongest level since December as the housing market showed renewed momentum. The rebound followed a slight easing in mortgage rates during the previous month, which encouraged more buyers to return to the market. As a result, the housing sector experienced stronger activity than many economists had anticipated.
Home sales rose by 3.2 percent compared with the previous month, reaching a seasonally adjusted annual rate of 4.17 million units. In addition, sales were also 3.2 percent higher compared with the same period last year. Consequently, the market recorded its strongest yearly pace in several months.
Home sales data reflect contracts signed earlier in the spring when borrowing costs briefly declined. Although mortgage rates later increased again, they remained below levels seen the previous year. Therefore, improved affordability conditions supported increased buyer activity across several regions.
Inventory levels also moved higher during the month, rising 3.3 percent compared with April to 1.55 million available units. Moreover, supply increased slightly from the previous year, although overall inventory remained tight by historical standards. At the current pace of transactions, the market represents a 4.5-month supply, which still favors sellers.
Home sales continued to push prices upward due to limited housing supply. The median price of an existing home reached 429,300 dollars, marking a 1.3 percent increase from the previous year. Additionally, this figure set a seasonal record for May, highlighting ongoing price pressure in the housing market.
Market analysts noted that most homeowners remained financially stable, with very few properties entering foreclosure or distressed sale conditions. Consequently, overall market stability remained strong despite affordability challenges for new buyers.
Home sales activity was particularly strong in the higher-end segment of the market. Properties priced above 1 million dollars saw an 11 percent annual increase in transactions. Meanwhile, lower-priced homes between 100,000 and 250,000 dollars experienced a decline in sales, reflecting affordability constraints.
First-time buyers also returned to the market in greater numbers, accounting for 35 percent of total transactions. This represented an increase from the previous month and a larger share compared with last year. Furthermore, homes spent an average of 29 days on the market, indicating steady demand conditions.
Cash purchases accounted for roughly one-quarter of all transactions, showing a slight decline from the previous year. Overall, the housing market demonstrated renewed strength in May, supported by shifting interest rates, improved demand, and gradual inventory growth.
