U.S. home prices continued to rise in the spring at the fastest pace on record and hit new highs. But this increase and continued low savings rates are driving potential buyers out of the market.
According to a report from the National Association of Realtors, the average home price in May was $350,300, up 24 percent from $283,500 last May. That’s the highest price ever recorded, marking a year-over-year increase in prices for 111 consecutive months.
The report showed that for the fourth consecutive month, sales of existing homes, including sales of single-family homes, townhouses, condominiums and co-ops, declined monthly. Total secondary home sales fell 0.9 percent from April. While sales are up 45% from last May, although that comparison is skewed because many lots closed a year ago.
“Home sales fell moderately in May and are now approaching pre-pandemic activity levels. Lack of money continues to be an overwhelming deterrent to home sales, with declining affordability simply driving some new buyers out of the market,” said Lawrence Yun, chief economist at NAR.