While the National Association of Realtors released a report Tuesday morning showing a drop in U.S. existing home sales in May amid temporary factors and financing problems, sales fell by less than economists had been anticipating.
The report said existing home sales fell 3.8 percent to an annual rate of 4.81 million in May from a downwardly revised 5.00 million in April. Economists had expected existing home sales to fall by 5.9 percent to 4.75 million from the 5.05 million originally reported for the previous month.
Lawrence Yun, NAR chief economist, said, "Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward."
"The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year," he added.
Even though sales fell by less than expected, the annual rate of existing home sales in May was the lowest since a 4.64 million rate in November of 2010.
NAR also said existing home sales in May were down 15.3 percent compared to 5.68 million in May of 2010, when sales were surging to beat the deadline for the home buyer tax credit.
The monthly decrease in existing home sales in May reflected a 3.2 percent drop in single-family home sales as well as an 8.1 percent drop in condominium and co-op sales.
Additionally, the report showed notable decreases in existing home sales in the Midwest and the South, where sales fell by 6.4 percent and 5.1 percent, respectively.
Existing home sales in the Northeast also fell by 2.5 percent, while existing home sales in the West were unchanged compared to the previous month.
NAR also said that the median existing-home price for all housing types was $166,500 in May, up 3.4 percent from April but down 4.6 percent from the same month a year ago.
Distressed homes, which are typically sold at a discount of about 20 percent, accounted for 31 percent of sales in May, down from 37 percent in April.
The report also showed that total housing inventories fell 1.0 percent to 3.72 million existing homes available for sale at the end of May. The inventory level represents 9.3 months of supply at the current sales rate, up from 9.0 months of supply in April.
"Even with recent economic softness, this is a disappointing performance with home sales being held back by overly restrictive loan underwriting standards," Yun said.
He added, "There's been a pendulum swing from very loose standards which led to the housing boom to unnecessarily restrictive practices as an overreaction to the housing correction - this overreaction is clearly holding back the recovery."
Thursday morning, the Commerce Department is due to release a separate report on new home sales in the month of May. Economists expect new home sales to fall to an annual rate of 305,000 from 323,000 in the previous month.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.