Home Sales Defy Expectations and Decrease in May

With homes purchased under the homebuyer tax credits still closing throughout May, economists across the country predicted increased home sales during the month. So today's news from the National Association of Realtors that existing-home sales fell 2.2 percent from April to May came as a surprise to many.

Existing-home sales fell to an annual rate of 5.66 million in May, down from an annual rate of 6.06 million in April, according to The Wall Street Journal.

Here at Zillow, we had expected sales to remain relatively robust until the homebuyer tax credit's deadline to close on June 30. While the market has hit a bottom in sales - despite the monthly decline, existing-home sales were up 19.2 percent from a year earlier - it has not yet hit a bottom in home values, according to Zillow's Real Estate Market Reports. Today's news make it clear the housing market continues to run into hurdles.