While home prices continued to grow in May, the growth slowed to the lowest rate on record since 2016, according to a new report from Realtor.com.
Realtor.com’s Monthly Housing Trends Report for May found that the median listing price grew by 0.9% to $440,000, up 38% from 2019. Active listings were up 21.5%, but down 50.7% from 2019. New listings fell 22.7%, and 30.4% from 2019. Median days on the market rose by 14 days to 43, down 9 days from 2019. The share of active listings with price reductions grew 2.6 percentage points to 12.7%, down 2.6 percentage points from 2019.
Key highlights:
- The median listing price per square foot declined (-0.3%) compared to the previous year for the first time since 2016.
- Higher mortgage rates and home prices compared to May of last year increased the monthly cost of financing 80% of the typical home by roughly $296 (+15.5%) compared to a year ago.
- Among the 50 largest metros, 15 out of the largest 50 markets saw their median list price decline. The greatest price declines were seen in Texas metros: Austin (-7.3%), Houston (-5.9%), and San Antonio (-5.8%).
- Nationally, 12.7% of active listings had their price reduced, up from 10.2% in May of last year but still below typical 2017-2019 levels. Large southern metros saw the largest increase in the percentage of homes with price reductions, led by Austin, Texas (+11.9 percentage points), San Antonio, Texas (+9.1 percentage points) and Oklahoma City, Oklahoma (+8.7 percentage points).
- Active inventory decreased in 21 out of 50 of the largest metros. Markets that reported large yearly declines included San Jose, California (-35.3%), Sacramento, California (-27.3%), and Hartford, Connecticut (-26.0%).
- Among the 50 largest metros, active inventory increased 20.8% over last year, driven exclusively by Southern metros, such as Nashville, Tennessee (+124.7%); Austin, Texas (+112.5%), and San Antonio, Texas (+93.4%). Most Southern metros still had lower inventory levels compared to pre-pandemic years.
- On average across the 50 largest metros, no region or metro area saw year-over-year increases in new listings. The South saw new listing activity decline the least (-20.4%) compared to last year, while they fell 32.9% in the West, 22.9% in the Northeast, and 22.8% in the Midwest.
- Across the 50 largest U.S. metros, the typical home spent 37 days on the market, 13 days more than the previous May. This trend was seen across all regions, with larger metros in the South seeing the greatest increase (+16 days), followed by the West (+12 days), Midwest (+9 days) and Northeast (+7 days).
- All of the 50 largest metros saw an increase in time on market compared to the previous year. Time on market increased the most in Raleigh (+31 days), Austin (+28 days), and Miami (+27 days).
Major takeaway:
“April and May are historically popular months to buy, and typically by this time in the year we’ve exceeded the prior year’s peak home price. Weakening home price growth for the past 12 months is increasing the odds that we may not see a new home price peak this year, for the first time in the history of our listing data, which dates back to mid-2016, and this is likely welcome news to homeshoppers,” said Realtor.com Chief Economist Danielle Hale. “Despite stalling price growth, home listing prices are up slightly compared to last May, and with rates more than a percentage point higher than a year ago, buyers continue to face affordability headwinds. The good news for sellers is that buyers are still out there, and this month’s slower growth in the active inventory of homes for sale indicates that shoppers are in the market and actively searching for homes that fit their needs and budget.”
Realtor.com® Executive News Editor Clare Trapasso added, “As buyers’ budgets are being stretched to the max, there are opportunities for negotiation, especially on homes that have been sitting on the market for a while. They can ask sellers to come down on the price, make costly repairs, as well as contribute to their closing costs or buy down their mortgage rates. If they’re purchasing new construction, they can also request upgrades. This can add up to substantial savings.”
For the full report, including more in-depth housing metrics on the 50 largest metros, visit https://www.realtor.com/.
