Home Sales Drop to 2019 Levels As Pandemic Boom Fades

Existing home sales fall for a fourth month, reaching pre-pandemic levels

Woman putting up a painting on a wall in her new home, unpacking boxes in her living room
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The high-flying pandemic-era housing market is finally falling back down to earth—at least in terms of the number of homes being sold.

Sales of existing homes fell 3.4% in May, a fourth straight month of decline that brought sales down to a seasonally adjusted annual rate of 5.41 million, on par with pre-pandemic levels, the National Association of Realtors said in a report Tuesday. The number of single-family homes, townhomes, condos, and co-ops for sale increased to 1.16 million in May from 1.03 million in April but remained near historic lows. With demand still far exceeding supply, the median sale price rose to $407,600, breaking the $400,000 level for the first time. 

With the continuing cooldown in sales, the housing market is starting to look more like it did in 2019 before COVID-19 hit and changed everything about the market. During the pandemic, ultra-low mortgage rates and an influx of buyers seeking space to support the telecommuting lifestyle fueled a boom in home sales and rapid price increases. But recent spikes in borrowing costs—a result of the Federal Reserve’s campaign of interest rate hikes to combat soaring inflation—have made buying a house less affordable, decreasing demand and slowing sales.

“The combo of low supply, high prices, and rising interest rates are creating major hurdles for potential homebuyers,” Priscilla Thiagamoorthy, an economist at BMO Capital Markets, said in a commentary. “Looking ahead, all signs point to a weakening housing market as financial conditions tighten further.”

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