The $30 million toe in the water

US home sales increased 3.2% in May, according to data from the National Association of Realtors, with the median existing-home price reaching a new May record of $429,300. the report highlights emerging green shoots in the housing market, with mortgage rates dipping slightly and price growth slowing, though inventory remains tight and affordability challenges persist.

Bankrate principal analyst Ted Rossman described the situation as showing "green shoots of progress" despite a difficult environment shaped by a shortage of homes for sale and high costs.

Mortgage rates, while higher than many anticipated at the start of the year, have declined relative to the prior spring, and price growth has decelerated, with some previously overheated markets in the South experiencing actual price declines.

Who is the buyer?

The report notes that the absolute low in home sales likely occurred over the past two years, and the market is now seeing some uplift from increased employment, life events, and improving affordability driven by lower mortgage rates compared to the past two years.

The 3.2% sales jump alongside a modest 1.3% price increase indicates Americans are moving rather than remaining stagnant, with income growth outpacing price appreciation.

Regional data shows varied performance, with the Northeast being the only region where sales declined year-over-year, dropping 8%, while its median price rose 4.2% to $534,900.

What auditors flagged in the May filing

The National Association of Realtors chief economist Lawrence Yun emphasized that supply remains insufficient and could tighten further if sales accelerate, potentially reigniting bidding wars.

Yun had revised the association's 2026 sales forecast downward a few months earlier due to stubbornly high mortgage rates and a sluggish start to the spring buying season .

The 3.3% increase in inventory levels from April and a 0.6% rise from May of the previous year marks a modest improvement, but Yun warns that supply remains a significant challenge.

Regional disparites

The South, which accounted for 47% of existing-home sales, continued to demonstrate strength, while the West recorded a 5.6% sales increase and a slight 0.7% price dip to $625,900.

Rossman pointed out that some Sun Belt markets in the South and West have experienced small price drops after a period of robust construction boosted inventory, creating slightly better conditions for buyers compared to last summer.

He stressed that the U.S. housing market is not monolithic but a patchwork of local markets, with inventory relatively healthier in the South and West, opening opportunities for prospective purchasers.