Sales of previously owned homes fell 9.7 percent in May compared April, the third monthly decline, the National Association of Realtors said Monday.
Existing home sales are counted at the time of closings. So these would have been based on contacts signed in March and April, when most of the country was under instructions to stay at home and real estate showings were off-limits in many areas.
Compared with a year ago, home sales were down 26 percent. Home sales hit an a 13-year high in February but began plunging as the coronavirus discouraged shopping from home, public health officials told Americans to avoid unnecessarily venturing out of their homes, unemployment jumped higher amid mass layoffs, and many states and cities prohibited realtors from showing homes in person.
Previously-owned homes make up most of the housing market, although the sales have a smaller impact on gross domestic product because so much of the work on them has already been completed. Nonetheless, existing home sales can drive sales in appliances, furniture, and home improvement goods. And they remain an important barometer of household confidence and prosperity.
Each of the four major regions of the country witnessed dips in month-over-month and year-over-year sales, with the Northeast experiencing the greatest month-over-month drop, according to the NAR.
The decline was worse than the 8.8 percent expected. Many economists expect that low interest rates and the reopening of the economy will drive up sales in June and in the months to come. Real estate showings are once again permitted in most of the country. Home sales typically peak in mid-summer.
According to the NAR, inventory of homes on the market increased to 1.55 million in May from 1.46 million in April. That is still 18.8 pecent below last year’s level. Inventory, like sales, tends to fall in the second half of the year into December and then rise to its peak in mid-summer.