Despite the fact that we are right now In the spring home buying season Existing home sales this may decreased Compared to one year ago and compared to April and home sales so far this year Are on track to decrease to a Multi-decade low approximately a 30-year Low regarding home sales this year on Top of that this is quite remarkable Given the fact that there's more houses For sale this may compared to to Previous years in fact there's Approximately a 2-year high of houses For sale right now meanwhile home prices Rose to an all-time record high this may But those gains may be losing momentum Due to the rise in mortgage rates Inventory and of course housing Affordability constraints as well this Is based on a brand new report from the National Association Realtors and in Today's video I'll provide my own take On their data and by the way if you guys Get any value out of today's video this Video took me hours to make due to all The analysis involved in it and um Spreadsheet alert I have some um some Analysis to share how the trends we're Seeing right now uh regarding um sales Home prices and inventory compared to Years past especially compared to preco Levels not mentioned in support uh from N and by the way we're also very very Close about 1,000 I'm shy of
100,000 subscribers on this channel I Just can't believe we're um at that Level I had about what two subscribers Back in 2019 when I started this channel So everyone who has subscribed to this Channel I appreciate you guys so much so With that said let's begin today's video Because I have a lot to share so here's The actual report from n it says Existing home sales slightly decrease in May as the median sales price climbed to New all-time record high uh by the way They Define um existing home sales are Completed Transactions uh that include single Family houses Town Homes condos and Co-ops that decreased by 7% compared to The previous month which was April uh to A seasonally adjusted annaly rate at 4.11 million units this may so let's Take a dive into this uh we'll talk About sales and then inventory and then Home prices uh here in a little bit as Well so regarding sales these figures Right here are seasonally adjusted They're also analyzed as well so uh 4,110 th000 was the current sales Pace Uh that month a decrease of 7% compared To April and down 2.8% year-over-year on A month-to-month Basis uh the Northeast the Midwest and The West were flat whereas in the South It decreased by 1.6% uh compared to 12 months ago we saw
Decreases in the Northeast the South and The West yet a small gain in the midwest Up by 1% all right let's get a little Bit nerdy here and share my own analysis Of their data so for May again 4.11 Million decrease of 7% compared to uh April and we're down 2.8% year-over year Um as I note right here close home sales In May were mostly for purchase contract Signed in other words your home Buy You got your offer accepted um back in March when the average 30-year fix rate According to Freddy Mack was at 6.82% this is also based on signed Contracts um in April as well and back Then the average rate was at 6.99% ever since then rates have been Hovering around 7% for average 30-year Fix so this will likely limit the number Of close home sales in the near term I've been seeing that same term for About 3 months now we haven't been Seeing a lot of fluctuations in rates And also we're not seeing a lot of Fluctuations regarding sales as well Sales have been relatively flat all year And again this is the heart of spring Home buying season so it's very telling So because of all this I expect sales to Remain very low unless rates and or Prices decrease in regards to sale Pace This may at 4.11 million this is Slightly more than the forecast the Forecast was only calling for a 4 08 a
Million sales Pace but this is also the Slowest sales Pace though of home sales Of the existing houses since January This year back in January the sales Pace Was only at 4 million now we're at 4.11 Million on top of that we're only about 260,000 um higher compared to the 13-year low that was set back in October Last year October last year as you can See right there 3 85 million now we're Um slightly above 4.1 million so we're Not too far off a 13-year um low Regarding existing home sales uh in the United States and like I mentioned we're On track to have fewer home sales this Year compared to last year which is Absolutely wild given the fact that in 2023 as a whole uh that was a 28e low all right let's also take a look At the month-to-month changes here Because ever since uh March sales have Been decreasing compared to the previous Month which is unusual so this marks a Third consecutive monthly decrease in Sales uh which is quite the difference Compared to the gains in January and February this year so back in January a 3.1% increase and then in February a Chin increase of 99.5% now we're down by 7% in my Personal opinion sales are likely Decreasing due to 7% mortgage rates and Record high home prices we have housing Affordability constraints which of
Course is limiting uh the amount of home Sales we're seeing right now uh and of Course we have you know relatively high Levels of rates given the fact we have Record high home prices as well so kind Of this double whammy that home buyers Are facing right now also inventory has Been climbing yet sales decrease so in Other words Supply is increasing yet Demand is falling and that is all Contributing to the rise of inventory Levels okay let's talk about the Year-over-year changes as well that Decreased by 2.8% compared to May of 2023 so it's still down year-over-year But not nearly as bad compared to the Past year though so for example sales Fail by double digits year-over year Every single month from June of 2022 through October of 2023 now we're only down by 2.8% so let's take a look at that June Of 2022 which is right here uh sales Decreased by 14.1% compared to June of 2021 and sales decreased by double Digits um from then until October of 2023 also this marks the 34th Consecutive month in which sales were Flat or down year of a year so we're Approaching basically three years of Decreases of home sales on on a
Year-year basis the last time home sales Increase year-over year was way back in July of 2021 now something added below here is How this compares to pre-co levels so May this year compared to May of 2019 Sales decreased by 25% also we saw a decrease of 31% Compared to May of 2021 back in 2021 we basically had a 15-year high in sales overall for the Year so we're down compared to pre-co Levels of course we're way down compared To uh the peak back in 2021 all right Let's change here slightly here and talk About inventory levels because this is One of the things we should very very Closely follow because this is an early Indication of what lies ahead and let me Explain so in May there was uh 1.28 Million houses for sale this is According to N I pull these numbers here From the website years ago and is add to It U each and every month this number at 1 .28 million includes pending home Sales and existing houses for sale That's why this number right here at 1.3 Million is much higher compared to other Um sources such as realor.com and alos Research.com any case that's how they um They measure inventory the unsold Inventory which includes some pening Home sales so any case 1.28 million That's the highest amount since August
Of 2022 however something you guys should Be aware of though is that these numbers Right here are not seasonly adjusted and Inventory tends to peak in the late Summer months so therefore when looking At previous mace numbers at 1.28 million Existing houses for sale this is the Highest level since May of 2020 so in other words a four-year high For the same month in regards to the Month supply we're sitting at 3.7 month Supply to start the year we were only at A 3-month supply so this is uh the Highest level since June of 2020 uh which is pretty astonishing uh But it's still lower than the average From 2017 through 2019 uh based on my analysis of their Data the average from that time period 17 through 2019 was a 3.9 month supply So we're still below the um historical Average uh compared to pre levels at 3.7 Months right now so this kind of helps To explain why we have record high home Prices because inventory levels I should Say the month supply is still well below Pre-pandemic levels however something You guys should be aware of though and I've been talking about this on channel For quite some time is the rate of Increase so we're not just talking about The month-to Monon change the change Compared to one year ago that's just
Kind of a sample of uh the trends we're Seeing right now regarding inventory Levels so I want to focus on right now Is the change so far this year so based On my nerdy Excel formula there Technically this is a Google doc um Inventory increased by 27% so this is January compared to May inventory Increased by 27% it is normal to see inventory rise Compared to January of course but this Increase is actually faster than the Growth rate in 2017 through 2019 for the same time frame January Through May each of those years yet it's Slower though compared to 20122 my take regarding this is that we Likely won't see a similar sharp Correction in home prices like we saw in 2022 but given the fact that inventory Has been rising fairly substantially Though I expect that home price growth Will slow down we're not going to see Home prices reach all-time record highs In definitely this year given the fact That inventory has been rising by um uh Um 27% compared to January and also We're up compared to 12 months ago as Well however though let's see what Happens in the months to come because The data coming in is ever changing so a Lot could change as well so in regards To this uh year-to-date change uh up by 207% though uh this is a big increase
Compared to the 10% gain we saw from January through May last year but at 20 7% this is actually much lower than the 35% gain we saw in the same time frame In 2022 uh that was because inventory Really increased big time starting in May and increased through July so they Saw a 35% gain at the same time frame in 2022 this year we're up by 27% however though looking at the gains In 2017 same time frame up by 177% we Saw increase of 23% in 2018 in 19 we saw A gain of 20% so inventory has been Increasing faster compared to preo Levels but not as fast compared to uh 2022 when of course back then we had uh Home prices uh decrease uh in the second Half that year so big picture inventory Is growing at a faster Pace compared to Years past except 2022 this should limit home price growth Unless key word there unless unless Mortgage rates decrease greatly and or Home prices also decrease greatly as Well going back to um n's report Regarding home prices let's talk about That so the meeting existing home sold Price for All housing types in May we're Not just talking about single family Houses this includes co-ops condos and Tow houses that increase to $ 49,3 this may the highest price ever Recorded all-time record highs an
Increase of 5.8% year-over-year all four US regions also posted gains and that's This right here 4 19,300 up by 99.2% in Northeast a gain Of 6.4 in the midwest a 3.6% increase in The south in the west we saw a gain of 5.5% overall though we're up by 5.8% also according to Lawrence Yun who Is nar's Chief Economist he say the Following home prices reaching new Highs Are creating a wider divide between Those owning properties and those who Wish to be first-time home buyers the Mortgage payment for a typical home Today is more than double that of houses Purchased before 2020 we saw rates more than double Compared to 2020 and home prices Increasing by about 40% as well and Speaking of home prices let's take a Look at my nerdy analysis of their data And these two columns is what I pulled From the website everything else is my Own analysis so right now the US meding So price is at $419,000 this means that out of all the Houses that closed uh for the month of May this year half sold for more than That and half sold for less than that That's what the Medan number means uh This is a new all-time record high on Top of that this is about $9,000 um higher compared to the Previous High which was set back in June
Of 20 23 at $410,000 also we saw an increase of 3.1% In prices compared to April uh this Marks the fourth consecutive monthly Gain which is seasonal because home Prices tend to increase in the spring Home buy season this 3.1% increase this May is slightly lower than historical Averages going back to 2010 though so Based on my nerdy Excel formula there uh The gain from April through May each and Every year going back to 2010 is an Increase of 3.4% whereas this year we saw a gain of 3.1% now we're looking at the gains Compared to one year ago it increased by 5.8% that marks the biggest year- ofe Increase since October of 2022 this also marks the 11th straight Month of year-over-year gains so for Comparison sake at this time last year Home prices were down year year for only The third time since 2012 so quite the turnaround compared to Last year um also this 5.8% gain this May compared to May of 2023 is slightly lower than the long run Average as well the long run average is A gain of uh 6.3% now we're up by 5.8% one thing you guys should should be Aware of regarding um home price changes Though regarding the median so price is This right here we're seeing more um
Home sales at the upper end of the Market and lower sales at the lower Range so in my personal opinion this is Impacting overall the um home price Trends we're seeing right now but is not The only reason why we're seeing record High home prices so for the existing Houses that sold this may in the range Of 750,000 to $1 million we saw a gain of 12.9% compared to May of 2023 houses that sold for over $1 Million surge by 22.6% in contrast though close home Sales in the range of 250 to 500,000 we Saw a small gain of only 1% and also Decreases for less than 250,000 another way to look at this is This right here houses over $1 million That Clos this may compared to last May Increased by 22.6% and also we saw a gain of 12.9% uh in the range of 750 to $1 Million and of course lower gains at These other price segments so just Taking a step back this is one of the Reasons why we're seeing overall the US Median so price increasing uh to All-time record highs because we're Seeing more sales at the upper range of The market and less sales at the lower Range but again not the only reason Because other reports such as the k er Um cor logic um S&P what's it called the
Uh S&P K Shiller cor logic uh index Which measures um home sales or home Prices based on the repeat sales method In other words they look at the house That um sold look at the previous sale For that exact same house we have Alltime record highs in prices as well For that as well in any case uh please Let me a comment below your thoughts Regarding that um let's go back to my um Dock here um let's talk about the Increase in sales compared to the past Several years so the uh us Med and so Price increased by 3% compared to two Years ago Rose by 18% from May of 2021 and again The Joint increase of 48% Compared to May of 2020 and over the past 5 years we saw a GI increase of 51% uh since 2019 and just for fun at this the change From May 2008 through May of 2009 Obviously during the Great Recession uh Sales not sales home prices taint by 16% Whereas this year it's up by 5.8% all Right going back to um neer's report Let's talk about first-time home buyers Because they purchased based on their Survey 31% of all home sales in May That's down from 33% compared to the Previous month and up from the 28% we Saw in May of 2023 also all cash sales Uh that represented about 20% of all Transactions so approximately onethird
Of all sales in May were coming from a Cash buyer that's unchanged compared to April and up from 25% from one year ago Also individual investors or second home Buyers who make up a lot of cash buyers Of course purchase 16% of all houses in May identical compared to April and up From the 15% we saw 12 months ago Distress home sales is virtually Non-existent as well these are Foreclosures and short sales uh we're Right right around 2% of sales in May That figure has been paided at around 1 To 2% for about two years plus so not a Lot of movement regarding uh Foreclosures right now and with that Said please comment below your biggest Takeaways from today's video my biggest Takeaway is that we have um you know Record high home prices despite the fact That inventory has increased um by Double digits compared to one year go so It makes it very challenging to predict What's going to happen and that's one of The reasons why I don't speculate on This channel I would never have guessed That we'd have all-time record highs in Prices given the fact we have 7% Mortgage rates which is more than double Compared to past several years and the Housing market is ever changing the data Coming in is Ever Changing as well but My biggest takeaway is the increase in Prices uh compared to 12 months ago and
Also record high prices uh but again we Have uh rates at around 7% so rates Remain very much elevated um Historically speaking and also when you Couple that with uh high home prices That makes housing affordability at Extremely low levels which of course is Limiting home sales this year even more So than last year so in my opinion we're Seeing a crash in sales over the past Two years but in contrast we're seeing Prices being supported um by the month Supply at still relatively low levels um And also lower compared to preco as well Anyways that's my biggest takeaway What's your biggest takeaway um also Please subscribe if you haven't done so Already I post frequent housing market Updates so you guys can make a more Informed decision to whether whether to Buy or sell a house right now and also You get um original analysis regarding Um home price and changes and also other Trends as well and Market as well Anyways I'm just babbling on hope you Guys have an awesome day and I Appreciate you guys so much and we'll See you in the next video [Music] [Music]
