Existing-home sales fell 0.4 percent in May to a seasonally adjusted annual rate of 5.43 million, according to the latest report from the National Association of Realtors. Sales have fallen year-over-year for three months and is 3 percent lower than a year ago. Excluding the Northeast, every region saw lower sales for single-family homes, townhomes, condominiums and co-ops, and on an annual basis, every region saw declines.

In May,

• Median existing-home prices were $264,800, an all-time high and up 4.9 percent last year’s $252,500.
• Properties averaged only 26 days on market, down one from last year, and 58 percent of total homes were on market for less than a month.
• Total housing inventory rose 2.8 percent from April to 1.85 million, but it is still 6.1 percent down from last year’s 1.97 million.

The South only saw a 0.4 percent decline in existing-home sales in May, the lowest in the country. However, the region has the second highest median price increase at 4.5 percent from a year ago, bringing the median up to $233,100.

Lawrence Yun, NAR chief economist, said the low sales rate is due to high prices and low supply in the housing market.

“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,” Yun said. “Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand,”

Despite high housing demand, first-time buyers were less active then they should be. In May, first-time homebuyers made up 31 percent of home sales, 2 percent down from April’s 33 percent. One reason is because mortgage commitment rates for a 30-year, conventional, fixed-rate mortgage have increased to 4.59 percent, the highest since May 2011’s 4.64 percent. 

“The abrupt hike in mortgage rates this spring, along with price appreciation and competition being the strongest in the entry-level part of the market, is why first-time buyers are not as active as they should be and their participation remains below its historical average,” said Yun