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US existing home sales improved slightly in May, a small sign of life for a housing market that’s been rocked by high mortgage rates and growing economic uncertainty.
Sales of previously owned homes rose 0.8% from a month earlier, to a seasonally adjusted annual rate of 4.03 million, the National Association of Realtors said Monday. Economists had expected a 1.3% drop to a rate of 3.95 million homes.
Compared to a year earlier, sales are down 0.7%.
Existing home sales are counted when a sale closes, meaning most homes went under contract a few months earlier, at the beginning of the traditional spring homebuying season. So far, signs point to a slow spring. Contract signings dropped sharply in April, and homes are spending more time on the market than they were a year ago.
“The relatively subdued sales are largely due to persistently high mortgage rates,” NAR chief economist Lawrence Yun said in a statement. “Lower interest rates will attract more buyers and sellers to the housing market."
Mortgage rates have held steady in recent months at around 6.8% and home prices remain near all-time highs, leaving many prospective buyers struggling with affordability. The median existing home sold for $422,800 in May, according to NAR data, a record high for the month. Prices have risen 1.3% from a year earlier.
If they can stomach high prices, buyers do have more homes to choose from this spring. As of May, housing inventory stood at 1.54 million, up 6.2% from a month earlier and 20% from a year ago.
Read more: 2025 housing market: Is it a good time to buy a house?
Sales were strongest in the more competitive and supply-constrained Northeast and Midwest regions. In the Northeast, existing home sales were up 4.2% from April and 4.2% from a year earlier. The Midwest reported a month-over-month gain of 2.1% and 1% growth from 2024.
In the South, existing home sales rose 1.7% from a month earlier, while they declined 5.4% in the West.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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