Did you find a solution? - Update: The solution is the one gmchandarana posted some comments below.
I have xcode on an external drive too.
The xcode app works, but Unreal can’t find it, because it’s configured to go to the applications folder. How do we change the path on UE?
Love you! that was it. That was just it. I have my xcode on an external drive, but it has nothing to do with it. It’s just that! Xcode > Preferences > Location > Command line tools (select version)
Worked, thanks
This worked for me also
Thanks
Checking in 10/2022 - this solution still works for Unreal 5. Thanks for the hot tip!
Same here - thanks for the tip!
thank you so much! worked smoothly
This worked for me. Thank you so much!
Thank You! Its worked 
Thank you!
Still works on unreal 5.1, thanks! But can someone explain, why does it work…?
And why, WHY, isn’t Epic Games hinting about this during installation? 0% of mac users know this, and 100% of mac users need it. The ones that already have Xcode doesn’t notice the demand for it, so they don’t even know this isn’t addressed by Epic Games. The only reason not to mention it must be a fully aware choice, driven by an extremely un-professional passive aggression against OSX.
Embarrising.
this helped me thanks
thank you it worked immediately
hello ı have same situation. ı tried that code but ı have
xcode-select: error: invalid developer directory ‘/Applications/Xcode.app/Contents/Developer’. and couldn’t open ue5 . can you help me ?
Thank you, This code worked for me
unreal 5.2 was working fine suddenly it said that I needed to download Xcode which already was downloaded. I un installed it and reinstalled and now its not opening to license
agreement just the welcome open project page.
Thanks. It worked.
i had the same problem , just open terminal and paste this line then hit your password
sudo xcode-select -s /Applications/Xcode.app/Contents/Developer