US existing-home sales hit 2026 high in May

Existing-home sales in the United States strengthened in May, rising 3.2% from the prior month to a seasonally adjusted annual rate of 4.17 million units. This marked the fastest sales pace recorded so far this year and signaled a rebound after a slower start to the spring buying season. The May performance also exceeded economists’ expectations, highlighting a pickup in buyer activity despite ongoing affordability challenges.

The improvement in sales came as the market continued to adjust to elevated borrowing costs and still-high prices. While overall activity remains below levels seen in some earlier years, the May data show that demand remained sufficient to absorb rising supply and sustain price growth at the national level.

The national median sales price for existing homes rose 1.3% from a year earlier in May to $429,300. This set a new record high for the month of May going back to 1999. The increase indicates that limited supply in many areas is still supporting prices, even as higher financing costs weigh on some buyers.

Rising prices add to affordability pressures for households, particularly in markets where inventory remains tight or competition for listings is strong. At the same time, the moderate year-over-year price gain suggests some easing relative to periods of faster appreciation, which may help stabilize conditions for both buyers and sellers.

Housing supply showed a modest improvement in May. There were 1.55 million unsold existing homes on the market at the end of the month, up 3.3% from April. At the current sales pace, this level of inventory represents about a 4.5-month supply, still below what is often considered a balanced market.

The incremental rise in listings provided more options for buyers and may have contributed to the pickup in transactions. However, the data suggest that supply constraints continue to limit choices in many areas, helping keep prices elevated despite the broader affordability headwinds.

First-time buyers accounted for 35% of existing-home purchases in May, the largest share since June 2020. Their increased presence points to some renewed participation from households entering the market, even as overall costs remain high. This shift is notable because first-time buyers are an important source of demand and can support transaction volumes across price segments.

Financing conditions showed a mixed picture. The average 30-year fixed mortgage rate stood at about 6.48% last week, down from around 6.85% a year earlier. While rates remain elevated compared with earlier low-rate periods, the year-over-year decline may be providing some marginal relief to qualified borrowers, helping support sales alongside the modest improvement in inventory.