T
he housing market remains uncertain, with a modest increase in home sales not enough to offset the impact of elevated mortgage rates and economic headwinds. Despite an uptick in inventory levels, buyers are being cautious, and existing-home sales rose only 0.8% in May compared to April, but remained down 0.7% from last year.

    According to Lawrence Yun, chief economist for the National Association of REALTORS, high mortgage rates are a major factor holding back sales. "Lower interest rates will attract more buyers and sellers to the housing market," he says. The 30-year fixed-rate mortgage averaged 6.81% in May, making it difficult for some buyers to afford homes.

    Home prices continue to rise, but at a slower pace than in previous months. The median existing-home sales price reached $422,800 in May, up 1.3% from last year and a record high for the month. However, Yun notes that price appreciation is slowing down, with some markets seeing increases of only 2-4% compared to 10-15% earlier this year.

    The increase in inventory levels has given buyers more negotiating power, but competition remains fierce in some areas. The median time on the market was 27 days in May, and 60% of homes sold for less than a month. Cash buyers continue to play a significant role in the market, with 27% of transactions being all-cash deals.

    Regional sales trends varied in May, with existing-home sales rising in the Northeast, Midwest, and South, but falling in the West. The Northeast saw a 4.2% increase in sales compared to April, while the West experienced a 5.4% decline.