Existing-home sales dropped again in May, falling 3.8% from April to a seasonally adjusted annual rate of 4.8 million, according to numbers released today by the National Association of Realtors (NAR). May sales were 15.3% lower year-over-year.

NAR rushed to emphasize the temporary nature of the factors to which it attributes May’s dip. Placing the blame on weather in the Midwest and high gas prices around the country, Lawrence Yun, NAR’s chief economist pointed to recently lowered oil prices and predicted that "the pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year."

Patrick Newport, U.S. economist at IHS Global Insight, disagrees. "The market is weak because demand is weak," he said on a call with Builder. Newport pointed to the fact that declines weren’t confined to the Midwest but were seen in most parts of the country; numbers dropped 2.5% in the Northeast, 6.4% in the Midwest, and 5.1% in the South, and remained flat in the West. "Weather may have played a role, and oil prices did go up," he said, but emphasized that oil prices have not been known to be a major indicator of closings in the past.

May’s sales were also held back, Yun said in a press statement, by "overly restrictive loan underwriting standards." And that problem, says Newport, isn’t likely to abate until prices stabilize. "It doesn’t make sense for lenders to loosen standards while prices are falling," he said. "The assets are losing value."

Indeed, the national median price for an existing home among all housing types fell in May to $166,500, down 4.6% from the year before, even as distressed properties accounted for the same portion of the market—31%—that they held in May 2010.

First-time buyers dropped to 35% of the market in May, from 36% in April. Investors also declined slightly, making up 19% of existing-home sales for the month, down from 20% in April.

As for where things are going, Newport said, "there’s no reason to expect a good month next month."

Claire Easley is senior editor for Builder.

Learn more about markets featured in this article: Greenville, SC.