The housing market in the United States has seen a recent decline in house price growth in May, according to a report released by the National Association of Realtors (NAR). The report showed that the median existing-home price for all housing types decreased by 0.7% in May to $285,700, down from April’s median of $287,800.
This decline in house price growth is the first since December 2018 and marks the first time that prices have decreased year-over-year since January 2012. The NAR attributed the decrease to a decrease in sales activity, with existing-home sales dropping by 3.7% from April to May. This decrease was driven by a decrease in sales of single-family homes, which fell by 4.4%, while sales of condos and co-ops fell by 1.6%.
The NAR also noted that the decline in house prices was due to a decrease in inventory, with the number of homes for sale falling by 6.1% from April to May. This decrease in inventory is likely due to a combination of factors, including an increase in homebuyer demand and a decrease in the number of new homes being built.
The NAR’s chief economist, Lawrence Yun, commented on the report, saying “The housing market is clearly slowing down as evidenced by the decline in closed sales and prices. The lack of available listings is preventing buyers from finding a home to purchase and is holding back overall sales activity.”
The decline in house price growth is likely to continue in the coming months, as the NAR predicts that existing-home sales will remain flat for the rest of 2019. However, Yun believes that the market will eventually recover, saying “We expect home prices to stabilize and then begin rising again as more listings come onto the market and economic growth continues.”
Overall, the nationwide report on house price growth in May shows that the housing market is slowing down due to a decrease in sales activity and inventory. While this is likely to continue in the near term, the NAR believes that the market will eventually recover as more listings come onto the market and economic growth continues.