U.S. home sales rebound sharply in May

According to data released by the National Association of Realtors (NAR), existing home sales increased by 3.2% month-on-month, reaching a seasonally adjusted annualized rate of 4.17 million units. The result exceeded economists’ expectations, which had pointed to an increase of less than 1%.

On an annual basis, sales also rose by 3.2%, marking the strongest pace of growth since December 2025. The transactions reflected in the data primarily relate to contracts signed in April, when mortgage rates eased slightly following the increase triggered by geopolitical uncertainty earlier in March.

“Improving affordability is contributing to stronger market momentum,” said NAR Chief Economist Lawrence Yun. According to Mr. Yun, mortgage rates remain lower than a year ago, while income growth continues to slightly outpace house price appreciation across most regions of the United States.

Limited Supply Drives Prices Higher

The inventory of homes available for sale increased by 3.3% compared with April, reaching 1.55 million properties. However, on a year-on-year basis, inventory growth remained below 1%, leaving the market in a state of relative supply constraint.

At the current sales pace, available inventory represents a 4.5-month supply, compared with the approximately six months generally considered indicative of a balanced market. The limited availability of homes continued to support prices. The median sales price of an existing home rose to $429,300, up 1.3% from May 2025 and marking a record high for the month of May.

At the same time, only 1% of transactions involved foreclosures or distressed sales in which the property was sold for less than the outstanding mortgage balance, suggesting that U.S. households continue to maintain a strong financial position.

Stronger Demand in the Luxury Segment

Market activity remains strongest in the upper end of the housing market, where supply is relatively more abundant and buyers are less sensitive to borrowing costs. Sales of homes priced above $1 million increased by 11% year-on-year, while transactions in the $100,000–$250,000 price range declined by 5%.

Another positive development was the return of first-time homebuyers, who accounted for 35% of total sales, up from 33% in April and 30% one year earlier.

The average time a property remained on the market was 29 days, down from 32 days in April but slightly higher than the 27 days recorded in May 2025. Meanwhile, approximately 25% of transactions were completed in cash, a share marginally lower than the corresponding level a year earlier.