Home sales and new listings fell behind last year’s levels in May as mortgage rates steadily rose, according to Zillow’s May Market Report.
New listings have historically peaked in May or June, but sellers pulled back this May; new listings ticked down 0.8 percent month-over-month, and now stand 4.1 percent lower than last year.
There were 1.36 million homes for sale nationwide in May. Active inventory was 1 percent higher than a year earlier. Inventory rose 4.6 percent from April. New for-sale listings were 422,956 in May, down 4.1 percent from a year earlier and down 0.8 percent from April.
341,929 homes were sold in May, according to the preliminary Zillow sales count nowcast. Sales trended up from April, rising 4.8 percent month-over-month, but fell off the historic trend line, declining 2.9 percent from last year.
Meanwhile, inventory growth continued to rise on an annual basis, extending an unbroken streak of annual growth to 30 straight months. However, the pace slowed and is trending towards negative, inching up 1 percent from last year.
Typical home values rose slightly (0.6 percent) on a monthly basis to $368,720. Combined with higher mortgage rates, that brought the cost of a typical mortgage to $1,861, rising 1.1 percent from April to May. However, mortgage rates remain lower than last year — even with a 0.8 percent annual growth in home values, typical mortgage costs are still 3.1 percent lower than last May.
“May housing results were disappointing for those hanging on to hope of a stronger year for sales,” Zillow Chief Economist Mischa Fisher, said in a release. "Inventory is rising, but weekly data suggests it could flatline in the next four weeks. A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year.”
Homes took a median of 18 days to go pending in May. That was one day longer than a year earlier and one day longer than April. The share of listings with a price cut in May was 23.9 percent. That's compared to 25.7 percent a year earlier and 23.5 percent in April.
28.4 percent of homes sold above list price in April, the most recent data available. That's compared to 30.1 percent a year earlier and 25.4 percent in March.