Home sales surged in May to the highest level since December

Key Points:

• Existing home sales in May increased by 3.2% from April to an annualized rate of 4.17 million units, surpassing economists' expectations of less than 1% growth and marking the strongest pace since December.
• The rise in sales is attributed to improved affordability, with mortgage rates slightly lower than a year ago and income gains outpacing home price growth in most regions, according to the National Association of Realtors' chief economist Lawrence Yun.
• Housing inventory grew 3.3% month-to-month to 1.55 million units, representing a 4.5 months supply, which remains below the balanced market level of six months, contributing to continued price increases.
• The median price for existing homes in May reached a record high of $429,300, up 1.3% year-over-year, while sales were strongest in the higher-end market, with homes priced above $1 million seeing an 11% increase.
• First-time buyers accounted for 35% of sales in May, up from 33% in April and 30% a year earlier, and homes sold in an average of 29 days, indicating sustained demand despite tight supply.