Homes.com, a CoStar Group leading online residential marketplace, released a new report analysing home prices in May (based on the data collected to date), price trends across major metros and what the latest developments in the housing market mean for homebuyers.
According to the preliminary estimates, home prices continued to increase in May. Still, the rate of price increases slowed for the fifth consecutive month, with the median home price rising modestly by 1.0% in May. Year-over-year, prices rose 1.3% in April, 2.2% in March, 2.7% in February, and 3.9% in January. In dollar terms, the median home price went up US$3,829 from May of last year to May of this year, from US$385,000 to US$388,829. Prices have increased for 23 consecutive months on a year-over-year basis, and the rate of increases peaked at 5.6% in the second half of 2024.
Easing price pressures offers some good news for homebuyers. In addition, May Homes.com data showed the inventory of homes for sale increased 17.2% compared to May 2024 to the highest level since October 2019. This rise in inventory and softening price pressures indicate a transition to a buyer’s market, especially in several key metros in the Sun Belt region. However, affordability continues to be challenging as mortgage rates remain elevated.
The highest price appreciation is concentrated in the Northeast and parts of the Midwest. However, the rates of price growth even in those markets have moderated. In April, the top three markets by price growth saw rates of increase between 10.5% and 10.8%. In May, the growth rates for the top three markets slowed to between 7.4% and 7.6%. The geography of the major metros with negative or flat price growth has broadened and now includes Texas, parts of Florida, parts of California, as well as Denver and Atlanta.
