The spring housing market has extended its strong run, according to the Realtor.com® May 2026 Monthly Housing Trends Report.
That’s despite climbing mortgage rates, rising inflation, and continued geopolitical uncertainty, Realtor.com noted.
Median list prices fell 2.4% year over year, the steepest decline in Realtor.com data since 2017, while pending sales increased for a sixth straight month and new listings hit their highest May level since 2022, continuing the most active spring market in four years.
“Higher rates and geopolitical uncertainty could have sidelined both buyers and sellers this spring,” Realtor.com Chief Economist Danielle Hale said. “Instead, we’ve seen six months of sellers adjusting their expectations and buyers rewarding them for it. List prices are down at a record pace, but price reductions are also down. That combination tells you sellers are doing their homework before listing, not after. The market is finding a new equilibrium.”
Realtor.com reported that the national median list price was $429,500 in May, up 1.1% from April in a typical seasonal move, but down 2.4% year over year. That’s the seventh consecutive month of annual price declines and the steepest drop in Realtor.com data going back to 2017, the website said.
Price Per Square Foot Falls
Price per square foot, which controls for the changing size mix of homes on the market, fell 2.5% year over year. That’s also a record annual decline in the series, Realtor.com noted.
Year-over-year median list price declines were recorded across all four major regions, ranging from -4% in the West to -1.2% in the Midwest. The sharpest per-square-foot declines were concentrated in Austin (-8.3%), Memphis (-5.9%), and Buffalo (-5.8%), Realtor.com said. At the other end, Providence (+9.1%), Indianapolis (+5.0%), and Cleveland (+3.1%) recorded the largest gains, the website said.
“Perhaps the most telling price signal in May came from what did not happen: price cuts fell rather than rose,” Realtor.com Senior Economist Jake Krimmel said. “The share of active listings with a price reduction declined 1.6 percentage points year over year to 17.5% — even as overall list prices continued to soften. In a crashing market, sellers list optimistically and get forced to cut. What we’re seeing is different in a key way: sellers are using current market conditions as price discovery from the start, pricing for current conditions rather than selling under distress. That combination tells you sellers have internalized the more buyer-friendly conditions and are adjusting price expectations before listing rather than after. This is a meaningful behavioral shift, and it’s precisely why buyers are still showing up despite rates above 6.5%.”
Realtor.com noted that listings in pending status rose 4.3% year over year in May, which extended a streak to six consecutive months of annual growth. That’s a run not seen since January through June 2021,Realtor.com noted.
The flow of contract signings rose 3.5% year over year. The sustained momentum in pending sales confirms that lower list prices are translating into buyer engagement even as mortgage rates have moved back above 6.5%, the website said.
Two Trends
According to Realtor.com, the two trends, falling prices and rising pending sales, are not a contradiction; they are two sides of the same coin.
Last year’s Cruel Summer report saw sellers hold firm on stale price expectations while buyers pulled back, and the gap between helped halt the market. This spring, sellers are meeting buyers where they are, and the transaction data reflects it, Realtor.com noted.
New listings reinforced the trend, the website noted. New listings rose 2.1% year over year in May to 474,976, their highest May level since 2022. At the metro level, Realtor.com said that Buffalo (+19.9% YoY), Providence (+18.1% YoY), and Richmond (+17.5% YoY) led the way.
Realtor.com said that one of May’s most consequential developments was a regional reshuffling of inventory patterns, marking a meaningful shift from recent months.
The website said that new listings were up in the Northeast (8.6% year over year) and Midwest (4.7%). In the South and West, meanwhile, new and active listings growth stalled, and rising days on market suggest the macro headwinds may finally be landing with real force in those markets.
The Northeast and Midwest reversal matters, Realtor.com said, because both have been inventory-starved for years, locked in by homeowners sitting on low-rate mortgages with little incentive to list. Realtor.com noted that the fact that new listings in the Northeast are now running nearly 9% ahead of last year — compared to a decline just two months ago — is meaningful because the lock-in effect may be loosening where buyers need relief most.
Active listings in the Northeast rose 7.1% year over year and 8.2% in the Midwest, while the South (0.3%) and West (1.4%) saw essentially flat active inventory, Realtor.com said.
Time on market is lower in the Northeast than a year ago (-1 day), which likely reflects an influx of fresh inventory energizing transactions in historically tight markets. Days on market rose modestly in the Midwest (+1) and South (+1), and more sharply in the West (+4 days), Realtor.com noted.
The sharpest active inventory gains were in Louisville (+32.7%), Cincinnati (+25.7%), and Indianapolis (+21.9%).
Mortgage Rates Rose
Realtor.com said that mortgage rates rose from 6.3% to 6.53% throughout May, driven by April’s Consumer Price Index coming in at 3.8%, fueled by the Iran War, and inflation. And, rising inflation delivered a double blow: eroding purchasing power while pushing bond yields and mortgage rates higher, presenting another round of headwinds for the spring selling season.
“Between higher inflation, climbing rates, and cratering consumer sentiment, a market pullback would have been easy to explain, but it didn’t happen,” Krimmel said. “New listings kept growing, pending sales extended their growth streak to six months and price cut share fell. All three of those indicators moved in the right direction simultaneously, even as rates climbed. The clearest explanation is that buyers and sellers have recalibrated to an environment where higher rates and economic uncertainty are the expected backdrop, not a shock. That said, resilience has limits.”
Realtor.com noted that two things bear close watching heading into June.
Cancellations & Delistings
First is contract cancellations and delistings. May and June 2025 were when tariff-driven uncertainty moved beyond consumer sentiment and bled into actual transaction behavior: cancellations increased and there was a large, sustained spike in sellers pulling their homes from the market, according to Realtor.com.
So far in 2026, cancellations have remained below the levels of recent years, it said.
The second thing is whether the Northeast and Midwest supply unlock sustains. Should new and active listings continue to grow in those inventory-starved markets, it would be a key sign that the broader market is normalizing. If the stalling inventory growth and rising days on market in the South and West begin showing up in cancellation data, that is the early warning sign that the macro pressure is starting to bleed through into behavior, Realtor.com said.
“It’s too early to declare the spring market has fully weathered the storm, but the leading indicators are holding,” Krimmel noted. “Cancellations are low, new listings are growing, and sellers are cutting prices less even as list prices fall. The variables to watch in June are whether the Northeast and Midwest momentum holds and whether that macro pressure in the South and West starts showing up in cancellation data. Those are the early warning signs. So far, we’re not seeing them.”
