Although the number of sales increased from April to May, the market still faces a major headwind: affordability. In order for affordability to improve, we need to see 1) prices come down, 2) interest rates come down, or 3) wages to go up.

For now, prices are down 1.5%, closed sales are down 16.9%, and pending sales are down 4.3% year-over-year.

Here's the stats:

• Closed sales are down 16.9% YoY and up 11.6% MoM from April

• Pending sales are down 4.3% YoY and up 2.0% MoM from April

• Affordability Index dropped 5 points to 69 as interest rates went up

• Days on market are up to 33 days

• Active inventory of single family homes is up 80.4% from this time last year with a month's supply of inventory of 2.2. It is still a Seller's market but buyers are becoming picky and lending is tighter with approximately 25% of properties coming back on the market.

The changes we are seeing are very healthy for the market long-term. How the housing market performs moving forward is largely decided by the federal reserve as they grease the gears of the economy.