{"id":174598,"date":"2024-06-26T14:02:21","date_gmt":"2024-06-26T20:02:21","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=174598"},"modified":"2024-07-23T11:06:24","modified_gmt":"2024-07-23T17:06:24","slug":"homes-sales-bottom-out-may-2024","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/homes-sales-bottom-out-may-2024","title":{"rendered":"Home Sales Bottom Out to Near-Record Low as Prices Continue to Climb"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC8057289386\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">Home sales fell to one of the lowest <\/span><span data-preserver-spaces=\"true\">levels<\/span><span data-preserver-spaces=\"true\"> on record in May as high prices, elevated mortgage rates, and a housing shortage continue to keep buyers on the sidelines.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to data published by Redfin, there have only been two months in the past decade with fewer home sales: when <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">mortgage<\/span><\/a><span data-preserver-spaces=\"true\"> rates jumped to a 23-year high in October 2023 and <\/span><span data-preserver-spaces=\"true\">in<\/span><span data-preserver-spaces=\"true\"> May 2020, during the early days of the pandemic.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">\u201cBuyers today are facing many of the realities of a hot market even though few homes are changing hands,\u201d Redfin senior economist Elijah de la Campa <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/home-sales-fall-to-near-record-low\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">said in a Redfin press release<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What the Data Says&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Home sales were down 1.7% on a seasonally adjusted basis in May compared to the month before and fell 2.9% year over year, while the median sale price rose 5.1% year over year to a record $439,716.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meanwhile, the average 30-year-fixed mortgage rate hit 7.06% in May. That\u2019s an increase from 6.43% a year ago and more than double the all-time low of 2.68% during the pandemic.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"573\" height=\"390\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image2.jpeg\" alt=\"Number of Home Sales (2012-2024) - Redfin\" class=\"wp-image-174601\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image2.jpeg 573w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image2-300x204.jpeg 300w\" sizes=\"auto, (max-width: 573px) 100vw, 573px\" \/><figcaption class=\"wp-element-caption\"><em>Number of Home Sales (2012-2024) &#8211; <a href=\"https:\/\/www.redfin.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">While prices have jumped, many sellers are <\/span><span data-preserver-spaces=\"true\">being forced<\/span><span data-preserver-spaces=\"true\"> to lower their list price, as fewer buyers <\/span><span data-preserver-spaces=\"true\">are incentivized<\/span><span data-preserver-spaces=\"true\"> to buy in a market with such high mortgage rates, and homes <\/span><span data-preserver-spaces=\"true\">are staying<\/span><span data-preserver-spaces=\"true\"> on the market for longer.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Around 19% of homes in May cut their price, compared to 13.2% from a year earlier, with the typical home for sale spending 32 days on the market. That\u2019s the highest level for any May since 2020, but similar to the length of time homes were on the market a year ago. The price drop was mostly seen in areas where housing supply has been increasing, such as in Florida and Texas.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"575\" height=\"386\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image1.jpeg\" alt=\"Number of New Listings (2012-2024) - Redfin\" class=\"wp-image-174600\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image1.jpeg 575w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/06\/image1-300x201.jpeg 300w\" sizes=\"auto, (max-width: 575px) 100vw, 575px\" \/><figcaption class=\"wp-element-caption\"><em>Number of New Listings (2012-2024) &#8211; <a href=\"https:\/\/www.redfin.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">The number of homes for sale has risen slightly, although 25% below pre-pandemic levels. New listings were up slightly compared to the month prior, <\/span><span data-preserver-spaces=\"true\">rising<\/span><span data-preserver-spaces=\"true\"> 0.3%, but have <\/span><span data-preserver-spaces=\"true\">risen<\/span><span data-preserver-spaces=\"true\"> significantly compared to last year, jumping 8.8%. <\/span><span data-preserver-spaces=\"true\">Active listings (<\/span><span data-preserver-spaces=\"true\">which includes<\/span><span data-preserver-spaces=\"true\"> homes that aren\u2019t selling) rose 0.4% from April and jumped <\/span><span data-preserver-spaces=\"true\">a whopping<\/span><span data-preserver-spaces=\"true\"> 11.1% from the <\/span><span data-preserver-spaces=\"true\">year before<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Does This Data Mean for Real Estate Investors?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The real estate market has been in a strange place for a while. More homes <\/span><span data-preserver-spaces=\"true\">are staying<\/span><span data-preserver-spaces=\"true\"> on the market for longer in some areas, <\/span><span data-preserver-spaces=\"true\">largely<\/span><span data-preserver-spaces=\"true\"> due to tepid interest from buyers, who are hesitant to buy when rates are high.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meanwhile, as has been the case for a while, some <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2024\/04\/15\/upshot\/mortgage-rates-homes-stuck.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">homebuyers are reluctant to list their homes<\/span><\/a><span data-preserver-spaces=\"true\"> and give up fixed low rates, <\/span><span data-preserver-spaces=\"true\">which are<\/span><span data-preserver-spaces=\"true\"> sometimes three points lower than today\u2019s rates. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> has contributed to a shortage of homes on the market, with a lag in homebuilding and <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/millenials-set-to-inherit-trillions-of-dollars-worth-of-underinvested-homes\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">baby boomers<\/span><\/a><span data-preserver-spaces=\"true\"> deciding to stay put <\/span><span data-preserver-spaces=\"true\">also<\/span><span data-preserver-spaces=\"true\"> contributing to the current housing shortage. <\/span><span data-preserver-spaces=\"true\">Mixed with high home prices<\/span><span data-preserver-spaces=\"true\">, it\u2019s created a stagnant housing market.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">\u201cSales are sluggish because high homebuying costs are making both house hunters and prospective sellers skittish,\u201d de la Campa said in the Redfin press release. \u201cAnd with so few homes for sale, buyers in some markets are getting into <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/win-bidding-war\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">bidding wars<\/span><\/a><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">which is<\/span><span data-preserver-spaces=\"true\"> helping push home prices to record highs.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Still, if mortgage rates start to tick down, sales could pick up. While inflation is down, the Federal Reserve says it\u2019s likely to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/federal-reserve-stalls-as-inflation-numbers-improve-may-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">keep rates as is until September<\/span><\/a><span data-preserver-spaces=\"true\">. When a rate cut does come, the Fed <\/span><span data-preserver-spaces=\"true\">is expected<\/span><span data-preserver-spaces=\"true\"> to stay slow and steady, which means rates are likely to follow at a similar pace.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Although home prices are still at record highs, a decrease in home sales means it\u2019s no longer a seller\u2019s market. In some areas of the country, buyers have more leverage. But a rise in interest rates means even those buyers are hesitating.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">With the Fed expected to keep rates steady until the fall, the real estate market could stay stagnant through the summer, which means real estate investors may need to be patient for a little while longer.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_0bf8da7aa55b2de8614841698c51022f\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_71efdcfc157b437236be006cf102fa00\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_3806050c7d63433c871aca84d88afca7 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/homes-sales-bottom-out-may-2024&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/homes-sales-bottom-out-may-2024&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Home sales hit their lowest point in May since the early months of the pandemic. What comes next?<\/p>\n","protected":false},"author":613681,"featured_media":172377,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119],"tags":[],"class_list":["post-174598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/174598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613681"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=174598"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/174598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/172377"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=174598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=174598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=174598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}