Austin, Texas – Home sales showed a modest uptick in May as previously owned properties sold at a seasonally adjusted annual rate of 4.03 million units, marking a 0.8% rise from April. However, this figure still represents a 0.7% decrease compared to the same month last year, according to the latest insights from the National Association of Realtors.

Analysts had initially projected a 1% drop in sales, indicating that the actual increase came as a pleasant surprise. The Northeast region led the sales growth with a 4.2% rise month-over-month. Meanwhile, the Midwest and South also reported increases, while the West experienced a 5.4% decline. This downturn in the West, the nation’s most expensive housing region, suggests that high prices may be constraining activity.

The data reflects closings that likely resulted from contracts signed earlier in the spring when mortgage rates were comparatively stable. By April, the average rate for a 30-year fixed mortgage surged beyond 7%, which likely contributed to the hesitant market momentum.

Lawrence Yun, the chief economist for NAR, attributed the subdued sales environment to ongoing high-interest rates. Yun expressed optimism, noting that if mortgage rates were to decrease in the latter half of the year, the housing market could see a resurgence thanks to increasing incomes, healthy housing inventory, and an abundance of job opportunities.

A notable increase in available homes may also have supported the slight sales rise from April. By the end of May, there were 1.54 million homes on the market, over 20% higher than the previous year. Currently, this translates to a 4.6-month supply of homes, a figure that remains historically low.

Despite this, prices continue to reflect upward pressure. The median sale price for existing homes in May reached $422,800, which is a 1.3% year-over-year increase and represents the highest median price recorded for that month.

While demand is robust, the competitive nature of the market remains evident, with 28% of homes selling for more than their listing price. This marks an increase from 18% in the previous month but shows a slight decline from 30% the year prior.

Sales have been particularly strong in the luxury market segment, though activity in homes priced over $1 million has lagged compared to last year. Notably, homes within the $750,000 to $1 million range saw a modest 1% increase in sales.

Yun remarked on the evolving dynamics of the upper-end market, stating that it had shown consistent strength over the past 20 months but may now be facing challenges due to stock market fluctuations linked to tariff announcements earlier in the spring.

In terms of timing, homes are taking longer to sell, with the average sales period extending to 27 days, compared to 24 days in the same month a year ago. Additionally, the share of first-time homebuyers remains low at 30%, declining from 31% last year, while cash transactions have increased, accounting for 27% of all sales.