U.S. home prices edged down 0.1% overall in May — marking just the fourth monthly decline in more than a decade — as more sellers are finding themselves adjusting to a market that’s no longer moving entirely in their favor, according to a report from real estate brokerage Redfin.
The data, pulled from the Redfin Home Price Index (RHPI), suggests the housing market cooled under pressure from elevated mortgage rates and growing inventory.
Notably, May’s slight month-over-month decline follows a 0.4% dip in April and matches the subdued price movement seen in August and September of 2022 — both months that coincided with peak mortgage rates.
While home prices are still up 3.6% from a year ago, that pace of annual growth slowed from 4.1% in April and is now at its lowest level since July 2023.
“Sellers are starting to feel pressure because many buyers have put their home search on pause in response to high housing costs, elevated mortgage rates and economic uncertainty,” said Redfin Senior Economist Sheharyar Bokhari. “More sellers are likely to adjust their price expectations in the coming months as they see examples of the market shifting in favor of buyers.”
“Still, home price trends are always local and some areas — particularly on the East Coast — continue to see strong growth,” Bokhari added.
Just 31.2% of homes sold in May went for above asking price — the lowest share for any May in the past five years.
At the metro level, 32 of the 50 largest U.S. cities saw home prices fall in May on a seasonally adjusted basis. Charlotte, N.C. led the declines, with prices dropping 2.7%, followed by San Francisco and Seattle, each down 1.3%.
Meanwhile, some areas continue to experience strong gains: Nassau County, N.Y. (+2.1%), San Diego (+1.6%), and Fort Lauderdale, Fla. (+1.5%) posted the largest monthly increases.
On a year-over-year basis, five major metros are still posting double-digit price growth:
- New York City: +12.4%
- Nassau County, N.Y.: +11.3%
- Detroit: +11.2%
- Philadelphia: +11.0%
- Chicago: +10.2%
By contrast, Florida and Texas metros are showing signs of market reversal. Tampa home prices dropped 5.5% year-over-year — the largest decline among major metros — followed by Austin, Texas (-3.6%) and San Antonio, Texas (-2.4%).
With pending sales slipping and inventory continuing to rise, the data indicates that sellers may need to adjust expectations heading into summer, particularly in higher-cost or previously overheated markets.
