Home prices edged down 0.1 percent in May on a seasonally adjusted basis, according to a new report from Redfin.
Home prices have only posted a month-over-month decline three other times in records dating back to 2012: April 2025, and August-September 2022 — when mortgage rates were peaking.
Home prices rose 3.6 percent on a year-over-year basis in May, down from 4.1 percent growth in April. It was the first time annual price growth has been below 4 percent since July 2023.
This is according to the Redfin Home Price Index (RHPI), which 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.
The homebuying market is cooling because sellers significantly outnumber buyers. Less than one-third (31.2 percent) of homes that sold in May went for over their asking price, the lowest May share in five years. At the same time, pending sales are ticking down and inventory is still rising.
“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,” Redfin Senior Economist Sheharyar Bokhari said in a release. “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, like homes selling below asking prices. Still, home price trends are always local and some areas — particularly on the East Coast — continue to see strong growth.”
Prices fell from a month earlier in 32 of the 50 most populous metro areas on a seasonally adjusted basis in May.
The biggest decline was in Charlotte, N.C. (-2.7 percent), followed by San Francisco (-1.3 percent) and Seattle (-1.3 percent). Prices increased most in Nassau County, N.Y. (2.1 percent), San Diego (1.6 percent) and Fort Lauderdale, FL (1.5 percent).
On a year-over-year basis, five major metros are still posting double-digit growth: New York (12.4 percent), Nassau County, N.Y. (11.3 percent), Detroit (11.2 percent), Philadelphia (11 percent) and Chicago (10.2 percent).
At the other end of the spectrum, Tampa, Fla., posted a 5.5 percent decline in prices from a year ago — the biggest drop of any major metro. Next came Austin, Texas (-3.6 percent), and San Antonio (-2.4 percent).