Existing home sales in the U.S. unexpectedly decreased in the month of May, according to a report released by the National Association of Realtors on Wednesday.
NAR said existing home sales fell by 0.4 percent to an annual rate of 5.43 million in May after plunging by 2.7 percent to a downwardly revised 5.45 million in April.
The drop surprised economists, who had expected existing home sales to climb to an annual rate of 5.52 million from the 5.46 million originally reported for the previous month.
With the unexpected decrease, existing home sales in May were down by 3.0 compared to the same month a year ago and have fallen year-over-year for three straight months.
“Closings were down in a majority of the country last month and declined on an annual basis in each major region,” said NAR chief economist Lawrence Yun.
He added, “Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market.”
The report said the median existing home price was at an all-time high of $264,800 in May, up 2.7 percent from $257,900 in April and up 4.9 percent from $252,500 in the same month a year ago.
NAR said total housing inventory climbed 2.8 percent to 1.85 million existing homes available for sale at the end of May but is still 6.1 percent lower year-over-year.
The unsold inventory represents 4.1 months of supply at the current sales pace, up from 4.0 months in April but down from 4.2 months in May of 2017.
The drop in existing home sales came as single-family home sales fell by 0.6 percent to an annual rate of 4.81 million, more than offsetting a 1.6 percent jump in existing condominium and co-op sales to a rate of 620,000.
Next Monday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.