The cost of homes in the United States hit a new all-time high in May for the fourth consecutive month. However, experts say the "continuous acceleration" of prices may finally be cooling after nearly a year.
The national median listing price for active listings — driven by the lack of available homes – notched $380,000 last month, according to Realtor.com. It marked the tenth straight month of double-digit price increases.
However, the growth rate in median listing prices slowed to about 15.2% in May compared to a year ago. This is slightly lower than the 17.2% increase reported in April compared to a year ago, according to the real estate listings website.
"While still in the double-digits, May was the first non-weather related slowing in price appreciation since April 2020," Realtor.com chief economist Danielle Hale said. "The good news is that price momentum may be beginning to cool off."
And while this is a good sign for buyers, Hale and Realtor.com senior economic research analyst Sabrina Speianu cautioned that prices are still rising due to the constrained inventory.
Consumers are still throwing their homes on the market though, with new listings in May up 5.4% year-over-year. However, since inventory is still smaller compared to prior years, homes on the market are selling at a faster pace, ultimately cultivating a more competitive market.
"Homebuyers looking to lock in still low mortgage rates face fierce competition for fewer homes for sale than last year's historic pandemic lows, pushing up the typical asking price in May to an all-time high for the fourth consecutive month," said Hale.
For instance, homes are flying off the market 32 days faster than a year ago and 18 days faster than 2017 through 2019.
Hale projected, however, that after the summer seasonal peak in home prices, "we could see growth fall back to a more normal single-digit pace in the fall."
The 2017-2019 figures are key in providing perspective since the housing market stalled last April and May, which can exaggerate year-over-year comparisons, according to Realtor.com.