Brace yourself—home prices just hit another record, even as sales barely budge.
According to CNBC, sales of previously owned homes in the U.S. crept up by 0.8% in May 2025, reaching an annualized rate of 4.03 million units, while the median price soared to $422,800, a new high for the month, despite high mortgage rates dampening activity.
Let’s break down the numbers. Sales defied expectations, as housing analysts had forecasted a 1% drop for May 2025. Yet, compared to May 2024, sales were still down by 0.7%.
Regionally, the picture varies widely. The Northeast saw a robust 4.2% month-to-month increase, while the Midwest and South also posted gains, though exact figures weren’t available. Meanwhile, the West—the priciest region—saw a sharp 5.4% drop in sales.
Timing matters here. These sales reflect closings, with contracts likely inked back in March and April 2025. During that period, 30-year fixed mortgage rates held steady in March but climbed above 7% in April, squeezing affordability.
Inventory offers a sliver of hope. By the end of May 2025, 1.54 million homes were available for sale—a hefty 20% jump from May 2024. Still, at the current sales pace, this represents just a 4.6-month supply, historically tight.
Prices, however, show no mercy. The median cost of an existing home reached $422,800 in May 2025, up 1.3% from the same month last year. This record high underscores how demand outstrips supply, even with more homes on the market.
Demand dynamics are telling. A striking 28% of homes sold above list price in May 2025, up from 18% in April but down from 30% a year earlier. Buyers are still competing fiercely in many markets.
Where are sales strongest? Higher-end homes are moving, with a 1% uptick in the $750,000 to $1 million range compared to last year. However, sales in the $1 million-plus bracket dipped from May 2024 levels.
Buyers are also waiting longer. Homes lingered on the market for an average of 27 days in May 2025, up from 24 days a year prior. This slowdown hints at cooling urgency among some purchasers.
Who’s buying? First-time buyers accounted for 30% of purchases in May 2025, a slight dip from 31% last year. Meanwhile, all-cash deals rose to 27% of transactions, up from the prior year, signaling investor interest persists. High mortgage rates remain the elephant in the room. As Lawrence Yun, NAR’s chief economist, noted, “The relatively subdued sales are largely due to persistently high mortgage rates.”
Yun also offered a glimmer of optimism. “If mortgage rates decrease in the second half of this year, expect home sales across the country to increase,” he said, pointing to strong income growth and healthy inventory.
But let’s be real—rates above 7% are a wealth-killer for many. For investors and savers, this market demands patience and strategy. Consider focusing on regions like the Northeast with sales momentum, or explore all-cash deals to sidestep borrowing costs.
The housing market is a microcosm of broader economic tensions—tight supply, high costs, and monetary policy headwinds. Stay frugal, watch rate trends, and remember: real estate builds wealth over decades, not months. Keep your powder dry for when affordability shifts.