• Zillow expects existing home sales to increase 0.9 percent in May 5.51 million units at a seasonally adjusted annual rate (SAAR).
• The year-over-year change in existing home sales could be down for a third consecutive month, the first time we have seen that long a string of year-over-year declines since September 2014.
• New home sales should fall 2.8 percent from April, to 644,000 units (SAAR).

In May we expect existing home sales to rise modestly and new home sales to fall modestly, but do not foresee either fundamentally shifting the recent trend. Over the first four months of 2018, existing home sales increased twice and fell twice from the previous month – essentially going nowhere and on average flat. The four-month average, however, is down from the same period in 2017: What appeared to be a plateau in existing home sales for much of the past year and a half is starting to appear like a slight downward shift. Our forecast suggests a 0.9 percent drop in existing home sales from April, to 5.51 million units at a seasonally adjusted annual rate (SAAR).

This would put existing home sales down 1.6 percent from May 2017. The pace of year-over-year changes in existing home sales would then be down for three consecutive months, at an accelerating pace – the first time we have seen that long a string of year-over-year declines since September 2014.

The National Association of Realtors (NAR) will report existing home sales on Wednesday, June 20th.

New home sales have gradually and haltingly marched higher, suffering periodic setbacks such as the 1.5 percent decline reported in April. Our forecast points to another month-over-month decline with new home sales expected to fall 2.8 percent in May to 644,000 units (SAAR). New home sales would still be up 6.6 percent over the past year.

We will even more interested in the price point of new homes sold in May. In April, the median price of new homes sold fell sharply despite rising cost headwinds for homebuilders: It will be difficult for this to repeat itself, and the April data point is likely to be revised upward.

The U.S. Census Bureau will report new home sales on Monday, June 25th.