New US home listings and sales dropped on an annual basis in May amid elevated mortgage rates, halting a market recovery, Zillow Group (Z, ZG) said Thursday.
New for-sale listings fell 4.1% year over year to 422,956 units last month, while sales declined 2.9% to 341,929 units, according to the real estate marketplace.
Although new listings have historically peaked in May or June, sellers pulled back last month. While sales rose on a monthly basis in May, they fell off the historic trend line. Mortgage rates rose past 6.5%, Zillow said.
"May housing results were disappointing for those hanging on to hope of a stronger year for sales," Zillow Chief Economist Mischa Fisher said.
The mortgage payment on a typical home dropped 3.1% annually to $1,861 in May, while home values rose 0.8% sequentially to $368,720, the report showed.
Active inventory increased 1% year over year last month, extending a streak of annual gains to 30 consecutive months, though the growth rate decelerated, Zillow said.
"Inventory is rising, but weekly data suggests it could flatline in the next four weeks." Fisher said. "A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year."
On Wednesday, a report by the Mortgage Bankers Association showed that mortgage applications in the US fell in the week ended May 29.
"The prospect of easing energy prices given the evolving situation in the Middle East brought mortgage rates slightly lower last week," Joel Kan, the MBA's deputy chief economist, said at the time. "The retreat in rates, however, did not lead to an increase in mortgage applications."
Price: $35.63, Change: $+0.12, Percent Change: +0.32%
