Existing home sales reached their highest level of the year in May, rising 3.2% after a 0.7% increase in April. According to the National Association of Realtors (NAR), sales reached a seasonally adjusted annual rate of 4.17 million units, surpassing the projected 4.07 million. On a year-over-year basis, existing home sales are up 3.2%.
Insights from the NAR
Chief Economist Dr. Lawrence Yun highlighted a surge of positive momentum in the housing market, noting that rising sales and stable homeowner finances will have a positive impact to the broader economy.
“More Americans are on the move, with home sales rising to the highest level since December. This is great news for the housing market and the economy,” said NAR Chief Economist Dr. Lawrence Yun. “Improving affordability is helping drive this momentum. Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average. Income gains are also outpacing home price growth by a small margin in most parts of the country.”
“The new record-high May home price reflects solid fundamentals for homeowners and ongoing supply constraints,” Yun said. “Only 1% of all home sales involved a foreclosure or an underwater situation in which the sale price could not cover the outstanding mortgage balance. This shows that homeowners are on solid financial footing.”
“Increased home sales mean more economic activity — lawn care, furniture purchases, moving services, mortgage originations and other related business activities all get a boost,” Yun added.
(Press release)
Background: Why Existing Home Sales Matter
Existing home sales measures the monthly sales of previously owned single-family homes, condos, and co-ops. Because they account for roughly 90% of the residential market, they serve as a vital pulse check on the broader economy.
There is a high correlation between these sales and broader consumer spending. A move into a "new" existing home typically triggers secondary purchases in furnishings, appliances, and home improvement. Conversely, a sustained downturn in this data often serves as a leading indicator of economic contraction.
Over this time frame, we clearly see the real estate bubble, which peaked in 2005 and then fell dramatically. Sales were volatile for the first year or so following the Great Recession with monthly sales as low as 3.45 million units to as high as 5.44 million units. We have seen that same volatility following the most recent recession, with sales ranging between 3.85 million units to 6.73 million units.
Existing Home Sales: The Population-Adjusted Reality
While raw data shows a market in flux, adjusting for population growth reveals a deeper trend. Since 2000, the U.S. population has grown by approximately 23.3%. Existing home sales are 20.3% below the NAR's January 2000 estimate but when we account for population growth, current sales levels are 34.6% below turn-of-the-century levels.
The 30-Year Fixed Rate Mortgage
According to Freddie Mac, the average 30-year fixed rate mortgage in May 2026 was 6.44%, the highest level since last August.
Existing Home Sales: Median Price
The median price for an existing home rose for a fourth straight month in May to $429,300, the highest level since last June. This represents a 2.8% increase from the previous month and a 1.3% increase from one year ago, marking the 35th consecutive month of year-over-year increases.
ETFs associated with residential real-estate include: iShares Residential and Multisector Real Estate ETF (REZ).
Read more updates by Jen Nash
