Existing-home sales fell again in May as limited inventories of available homes again lifted US median home prices to a new record, according to industry data released Tuesday.
Completed transactions of single-family homes dropped 0.9 percent from April to a seasonally adjusted rate of 5.8 million in May, according to the National Association of Realtors.
"Home sales fell moderately in May and are now approaching pre-pandemic activity," said Lawrence Yun, NAR's chief economist.
"Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market."
Total housing inventory rose 7.0 percent in May from April, but the median price for all housing types was $350,300, up 23.6 percent from the year-ago period and yet another record.
Low mortgage rates enabled by the Federal Reserve's emergency rate cuts at the start of the Covid-19 crisis helped support the housing market last year even as the US economy grappled with widespread unemployment caused by the pandemic.
Nancy Vanden Houten, lead US economist at Oxford Economics, said the housing market remains underpinned by strong demand and an improving economy, "but a lack of supply and eroding affordability will continue to pose headwinds."
But Ian Shepherdson of Pantheon Macroeconomics said there were signs the market is shifting, noting that inventory, while low, is "starting to creep higher," he said in a note.
"We think the real story more likely is that demand for single-family homes in the suburbs has faded as Covid has retreated," Shepherdson said.
"The decline in sales and rise in inventory means that the extreme upward pressure on prices should soon start to fade."