Existing home sales plunged in May, according to the National Association of Realtors. However, some Realtors expect that this drop may represent a bottom in the market.
For May, sales of existing homes fell by 9.7% from in April to a seasonally adjusted annualized rate of 3.91 million units. On an annual basis, sales were down 26.6%, the largest annual decline since 1982. At that time, interest rates were around 18%.
Also May saw the slowest sales pace since October 2010. Considering the current pandemic, it makes sense that sales would lag. At the same time, the supply of homes did not help, and more potential sellers are deciding to wait.
The median price of an existing home sold in May was $284,600, an increase of 2.3% from May 2019. This is also the smallest annual rise since February 2012, which is when the market had started to recover from the Great Recession.
On the other hand, the nation’s homebuilders seem to be gaining from the current lack of existing homes for sale. The National Association of Home Builders has an index measuring homebuilder sentiment, and this took a huge leap in June, back into positive territory and falling off a cliff in April.
Accordingly, builders have reported increased traffic in both sales and buyer traffic, even though some of this traffic is online and virtual.