I’ll be starting this month by checking in on one of the most important numbers for the real estate industry: existing-home sales.

They actually surprised slightly to the upside in May, when closed sales ran at an annualized rate of 4.03 million. That is ever so slightly higher than April’s figure, and ever so slightly lower than in May of 2024, but in both cases it’s less than a percentage point difference – let’s just call it roughly flat. And “flat” pretty much sums up existing-home sales for the last couple of years: outside of some seasonal outperformance this past Q4, we’ve just been bouncing around an annual sales rate of about 4 million.

Zooming out to the last 30 years puts that in perspective: 4 million existing home sales puts us right around the lowest lows of home sales in the Great Recession. This lack of turnover is being driven by affordability challenges for buyers and the lock-in effect for sellers, as well as the aging of the US homeowner population: older folks just don’t move and sell as much as younger households.

But that doesn’t mean no one is trying to sell. The month of May ended with over a million active listings on the market according to Realtor dot com’s data, bringing the market very close to pre-pandemic inventory norms. In fact, the National Association of Realtors reported that when they measure inventory in terms of Months of Supply, it actually exceeds its May 2019 level.

Pending sales ticked up by just under 3% in May, year-over-year. That’s an early indication we may see some modest year-over-year gains for closed sales in June, but the market is still looking quite sluggish.

Turning to the macroeconomy, we got another good, surprisingly cool CPI inflation report for the month of May. The annualized monthly growth rate of prices was almost exactly 1%, and the year-over-year change in CPI from last May was only 2.35%. This metric has been inching down closer and closer to the Fed’s goal of a 2% inflation rate, which is part of its dual mandate along with pursuing “maximum employment.”

Finally, it’s another pretty quiet month for mortgage rates, which are once again stuck in a range between 6 and ¾, and 7%. It’s been a busy news month, but mortgage rates mostly took it in stride, drifting down slightly in the last couple weeks to end up basically where they were at this time last month. The Federal Reserve declined to change its overnight Federal Funds Rate at its June meeting, but there is growing pressure to resume cutting rates soon, if inflation remains as muted as it has been this spring. Personally, I still think the Fed will wait till clearer signs of labor market deterioration before cutting; moreover, a growth slowdown is probably what bond traders need to see before long-term yields like mortgage rates fall substantially.