US Existing Home Sales Rise in May Amid High Mortgage Rates and Prices

May Existing Home Sales Data

• 📈 US existing home sales unexpectedly rose by 0.8% in May, following a 0.5% decrease in April.
• ⚠️ Despite the increase, the sales pace was the slowest for May since 2009, indicating continued market weakness.

Key Constraints on the Market

• 🔑 Persistently high mortgage rates, hovering just under 7% for the 30-year fixed rate, are identified as a primary reason for the low sales volume.
• 💰 Elevated home prices also continue to be a significant constraint for potential buyers.

Housing Market Supply and Pricing

• 📦 The supply of existing homes on the market surged by 20% compared to the previous year.
• 💲 The median price of a previously owned home reached an all-time high for May, increasing by 1.3% to $422,800.

Economic and Federal Reserve Context

• 📉 Aggressive tariffs on imported goods have heightened economic uncertainty, leading the Federal Reserve to pause its interest rate cutting cycle.
• 💬 However, Fed policymaker Michelle Bowman expressed openness to potential rate cuts in July.