U.S. home prices in May experienced their biggest annual increase in more than two decades, as a shortage of properties and low borrowing rates fueled demand, the Wall Street Journal reported. The median existing-home sales price in May topped $350,000 for the first time, the National Association of Realtors said Tuesday. The figure was nearly 24% higher than a year ago, the biggest year-over-year price increase NAR has recorded in data going back to 1999. Sales prices have been climbing sharply since last summer, when lockdowns related to the COVID-19 pandemic eased across the country and many people rushed to find more space and bigger homes. Others working remotely seized on the chance to move to a less expensive city. The price increase is contributing to a slowdown in the pace of home sales. Existing-home sales fell 0.9% in May from April, marking the fourth straight month of declining sales, NAR said. Sales are also slipping because there aren’t enough homes on the market to meet demand, say economists and real-estate agents. Homes that are for sale are moving quickly. The typical home that sold in May spent 17 days on the market, matching the record low reached in April, NAR said. Buyers with limited cash for down payments are struggling the most to compete. Just over half of existing-home buyers in May who used mortgages put at least 20% down, according to a NAR survey.
