Title: Home sales just posted their slowest May in 16 years - NPR

Tags: housing market, real estate, home sales, mortgage rates, economy, buyers market, sellers market

Content:

Home Sales Hit a 16-Year Low in May: A Shifting Market Landscape

The U.S. housing market continues to exhibit signs of a slowdown, with May 2025 marking the slowest month for home sales in sixteen years, as reported by NPR. This sluggishness is a continuation of a trend that began in 2022, driven primarily by elevated mortgage rates and persistently high home prices. The impact is far-reaching, affecting both buyers and sellers and fundamentally reshaping the dynamics of the market.

The Numbers Tell the Story

The data paints a clear picture of a cooling market. While the National Association of Realtors (NAR) reported a slight month-over-month increase in pending home sales in May, the overall number of completed sales remained at its lowest point since 2009. This indicates a significant challenge for sellers hoping for quick sales and high prices.

Several reputable sources corroborate this trend. Articles from the Greenwich Time, Houston Chronicle, and AP News all highlight the same concerning data:

Increased Contract Cancellations: Redfin's analysis reveals a concerning surge in canceled home purchase agreements. In May 2025, 14.6% of pending sales fell through, representing the highest cancellation rate for May since at least 2017. This indicates that even buyers who initially secure a contract are facing difficulties finalizing the transaction, likely due to factors like unexpected costs, appraisal issues, or changes in their financial circumstances. The Houston Chronicle* even reported that in May 6% of pending contracts were cancelled, up from 5% in May of the previous year. ([https://www.greenwichtime.com/business/article/housing-red-flag-data-show-increase-in-20397302.php](https://www.greenwichtime.com/business/article/housing-red-flag-data-show-increase-in-20397302.php), [https://www.houstonchronicle.com/business/article/housing-red-flag-data-show-increase-in-20397302.php](https://www.houstonchronicle.com/business/article/housing-red-flag-data-show-increase-in-20397302.php), [https://apnews.com/article/housing-market-canceled-sales-affordability-real-estate-908b8f21bbd9efa36e028a9557587329](https://apnews.com/article/housing-market-canceled-sales-affordability-real-estate-908b8f21bbd9efa36e028a9557587329))

Lengthening Time on Market: Homes are staying on the market significantly longer. As reported by Newsweek*, the typical U.S. home spent 51 days on the market in May, six days more than the previous year. This extended timeframe underscores the challenges sellers are facing in a market where buyer demand is weakening. ([https://www.newsweek.com/us-housing-market-finally-shifting-toward-buyers-2090358](https://www.newsweek.com/us-housing-market-finally-shifting-toward-buyers-2090358))

Factors Fueling the Slowdown

The current market slump is a complex issue, with several key contributing factors:

High Mortgage Rates: Elevated mortgage rates are undoubtedly the most significant deterrent for potential homebuyers. The increased cost of borrowing makes homeownership less accessible, particularly for first-time buyers and those with less financial flexibility. Fannie Mae's revised outlook anticipates an average 30-year mortgage rate of 6.5% by the end of 2025, suggesting this pressure will likely persist.

High Home Prices: While home prices have remained relatively flat year-over-year in some areas, they remain high in many regions, further exacerbating the affordability challenge for many potential buyers. The combination of high prices and high interest rates creates a formidable barrier to entry.

Economic Uncertainty: Broader economic uncertainty contributes to buyer hesitancy. Concerns about inflation, potential recession, and job security can make committing to a major financial investment like a home purchase a less appealing prospect.

A Shift in Market Power?

While the situation is challenging for sellers, the slowdown presents an opportunity for buyers. Newsweek highlights a potential shift in market power, indicating that buyers now have more leverage than they have had in recent years. Longer time on market and more available inventory translates to increased opportunities for negotiation and potentially better deals. This signifies a potential move towards a buyer's market, a stark contrast to the seller's market that has dominated the landscape for several years.

The Outlook: What Lies Ahead?

Predicting the future of the housing market remains difficult. However, the current trends suggest that the slowdown is likely to continue for at least the near term. While the exact extent of the cooling remains uncertain, experts agree that the market is undergoing a significant readjustment after years of rapid growth. The interplay between mortgage rates, home prices, and overall economic conditions will determine the pace and direction of the market's evolution in the coming months and years. While the slowest May in 16 years signals a notable shift, only time will tell the full extent of its implications for the future of the US housing market.