June 22 (UPI) -- The National Association of Realtors said Monday existing-home sales in May dropped nearly 10 percent from the prior month.
Sales of the previously-owned homes fell 9.7 percent from April to a seasonally-adjusted annual rate of 3.91 million in May. During the same month last year, the rate was 5.33 million, which means that there has been a 26.6 percent decline year-over-year.
The year-over-year drop is the largest annual decline since 1982 when interest rates were about 18 percent, but Realtors expect May to be a low point with business soon picking up again.
"Sales completed in May reflect contract signings in March and April -- during the strictest times of the pandemic lockdown and hence the cyclical low point," NAR's Chief Economist Lawrence Yun said in a statement.
"Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year."
Yun added that he has seen an increase in pending sales in some regions in recent weeks.
Moreover, mortgage rates have remained low in May and June as business activity reopened.
The average rate on a 30-year-fixed rate mortgage dropped to the lowest level on record at 3.13 percent last week, according to Freddie Mac.
Existing-home sales decreased in every region in May from April, with the sharpest drop in the northeast at 13 percent. In the Midwest, sales fell 10 percent, in the South, 8 percent and in the West, 11.1 percent.
The median existing-home price still increased 2.3 percent from a year ago, to $284,600 as a shortage of houses keeps prices higher. The the housing inventory is still down nearly 19 percent from a year ago.