• Zillow expects existing home sales to edge 0.3 percent lower month-over-month in May, falling to 5.55 million units at a seasonally adjusted annual rate (SAAR).
• New home sales should rise 6.8 percent from April, to 607,000 units (SAAR) and should continue gaining gradually over the next year.

Thus far in 2017, existing home sales have been volatile: rising in one month and falling the next. While there has been a slight upward trend on average, tight for-sale inventory is weighing on the number of new homes sold in any given month.

In May, we expect existing home sales – which the National Association of Realtors (NAR) will report later this week – to edge 0.3 percent lower to 5.55 million units at a seasonally adjusted annual rate (SAAR). Over the next year, we expect existing home sales to remain roughly in line with or slightly below current levels, with existing home sales expected to fall to 5.44 million units (SAAR) by May 2018.

New home sales fell sharply in April, driven by upward revisions to March estimates of new home sales and a large drop in new home sales in the West. We expect new home sales, which the U.S. Census Bureau will report on Friday, to rise 6.8 percent month-over-month in May to 607,000 units (SAAR), taking into account April’s surprisingly low new home sales numbers. May new home sales should be roughly in line with new home sales levels seen earlier this year and above levels seen in any month last year except for July. Over the next year, we expect new home sales to gradually rise to 580,000 units by May 2018, up 3.6 percent from May 2017.

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