US Existing-Home Prices Increase at a Slower Monthly Pace in May

On Tuesday, Redfin reported that US existing-home prices rose 0.3% month-over-month in May—the smallest increase on a seasonally adjusted basis since January 2023. Year-over-year, prices increased 7.2%, but Redfin believes annual growth is showing signs of plateauing.

The Redfin Home Price Index (RHPI) uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes. The RHPI measures sale prices of homes that sold during a given period and how those prices have changed since the last time those same homes sold.

On a seasonally adjusted basis, new listings rose 0.3% month-over-month in May and climbed 8.8% year-over-year, although they remain roughly 20% below pre-pandemic levels, Redfin reported.

In remarks accompanying the report, Redfin Economic Research Lead Chen Zhao said:

“We learned last week that inflation continued to cool in May, which means mortgage rates could decline in late summer or early fall. A drop in mortgage rates would bring both buyers and sellers back to the market, which could either accelerate price growth or pull it back depending on who comes back with more force. If sellers come back faster, prices would likely cool, but if buyers come back faster, prices would likely ramp up.”