Following a disappointing April for home sales data, and weakness in May's building permits data, our first glance at May sales suggests all is not well. Existing home sales slipped 0.4% MoM (and were revised lower in April), well below expectations o a 1.1% rebound.

This dropped the Existing Home Sales SAAR to 5.43mm - the lowest since January:

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The drop in sales was led by declines in purchases of single-family homes and cheaper properties, according to NAR, indicating that the market is being driven by those with higher income and financial assets. Purchases fell in three of four regions.

“Affordability challenges are hurting first-time buyers,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.

Higher prices are “terrific news for homeowners, but not all Americans are owners. They’re feeling left out by the constant outpacing of home-price growth over wage growth.”

“The housing affordability issue is becoming a crisis," he said.

First-time buyers made up 31 percent of sales, down from 33 percent a year ago.

And perhaps explaining why sales are dropping, median home price rose 4.9% YoY to a new record $264,800 (as the inventory of available properties fell 6.1% YoY to 1.85m, the lowest for a May ever).

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Time to keep hiking rates.