The National Association of Realtors (NAR) announced on Tuesday that the U.S. existing home sales declined 0.9 percent m-o-m to a seasonally adjusted rate of 5.80 million in May from an unrevised 5.85 million in April. This was the lowest reading since June 2020.

Economists had forecast home resales dropping to a 5.72 million-unit pace last month.

In y-o-y terms, existing-home sales surged 23.6 percent in May.

According to the report, three of the four major regions recorded m-o-m decreases in existing-home sales in May but each registered double-digit advances in y-o-y terms. The median existing-home price for all housing types in May was $350,300, up 23.6 percent y-o-y. This was a record high and marks 111 straight months of y-o-y gains.

Single-family home sales stood at a seasonally-adjusted annual rate of 5.08 million in May, being down 1.0 percent m-o-m, but up 39.2 percent from one year ago. The median existing single-family home price was $356,600 in May, up 24.4 percent from May 2020. Meanwhile, existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 720,000 units in May, unchanged from April but up 100.0 percent from one year ago. The median existing condo price was $306,000 in May, an annual advance of 21.5percent.

"Home sales fell moderately in May and are now approaching pre-pandemic activity," noted Lawrence Yun, NAR's chief economist. "Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market. The market's outlook, however, is encouraging. Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes."