According to the National Association of Realtors. May's sales of existing properties fell 3.4% to a seasonal adjusted annualized rate of 5.41million units.

Sales were 8.6% lower than in May 2021. April's sales were revised slightly lower as well.

This is the weakest reading since June 2020, which was during the early months of the Covid pandemic. Adjusting for that, it is the lowest since January 2020.

This reading is based solely on closings for the month. These are likely contracts signed between March andApril. The 30-year fixed rate average rose from around 4% up to 5.5% during that period. It is currently right around 6%, according to Mortgage News Daily. The affordability of housing has been boosted by rising rates and a rapid appreciation in the price of homes.

"I do anticipate a further decline in home sales," said Lawrence Yun, chief economist at the National Association of Realtors. The impact of higher mortgage interest rates is not yet fully evident in the data.

End May saw 1.16 million homes available for sale. That's an increase of 12.6% from month to month, but still 4.1% less than May 2021. At the current sales pace, that represents a 2.6-month supply.

Low supply continues to push up home prices. The median price of a house sold in May was $407,600, an increase of 14.8% from May 2021. That is the highest price on record since the Realtors began tracking it in the late 1980s.

The market's lower end is where the supply is most limited, and activity there is less than at the higher end. Between $100,000 and $250,000, the number of sales for homes fell 27% over a previous year. The 26% increase in sales of homes priced between $750,000 & $1 million was due to the increased demand. Year over year, sales of homes above $1 million rose 22%

However, homes sell quickly. The average length of time houses stayed on market was 16 days. This is the longest period in history for Realtors. All-cash sales were still elevated at 25% of all sales. Investors made up 16% of all transactions, down slightly from April and from a year ago.

The number of first-time purchasers accounted for just 27%, down from 31% last year. They are clearly the hardest hit by rising rents and affordability.

Danielle Hale (chief economist at Realtor.com), stated that higher short-term rates by the Fed are driving a needed housing reset. She called it a real estate refresh. The rebalancing of the market is essential, but it also increases the difficulty of navigating the market for sellers and buyers. Expectations and conditions are changing rapidly.

Realtor.com has updated its 2022 forecast, now projecting less sales than last year.