US Home Prices Rise in May at Fastest Monthly Pace Since January

On Wednesday, Redfin reported that US home prices rose 0.3% in May on a seasonally adjusted basis, the fastest monthly growth rate since January.

Year-over-year, price growth accelerated to 2.5%, the fastest annual gain in six months.

The Redfin Home Price Index (RHPI) uses the repeat-sales pricing method to calculate seasonally adjusted changes in single-family home prices, tracking how values change between sales of the same properties. May data covers the three months ending May 31.

Redfin attributed the pickup in home-price growth to deals that went under contract in April, when homebuying demand strengthened as mortgage rates declined. Closed US home sales reached their highest level since 2022 in May, and while inventory is also rising, Redfin noted that there still are not enough desirable, affordable homes on the market.

In remarks accompanying the release, Redfin Senior Economist Sheharyar Bokhari said:

“Buyers got a boost from lower mortgage rates in the spring, and that momentum is showing up in prices. And even though there are many more home sellers than buyers in the market, the most desirable homes are still attracting multiple offers, driving up prices. Buyers who are waiting for prices to fall may not get much relief; instead, they may consider expanding their search area or negotiating for concessions—like mortgage-rate buydowns or closing-cost credits—from sellers.”