Key facts
- U.S. single-family home prices increased 0.3% in May.
- Home prices rose 2.2% in the 12 months through May.
- The average 30-year fixed-rate mortgage hit 6.58% last week.
- A shortage of previously owned homes, especially starter homes, is supporting prices.
- The National Association of Home Builders estimates a housing shortfall of 1.2 million units.
U.S. single-family home prices saw a 0.3% increase in May, rebounding after a 0.1% dip in April, according to the Federal Housing Finance Agency. Year-over-year, prices rose 2.2% through May, supported by a persistent shortage of available homes, particularly starter homes.
The average rate for a 30-year fixed-rate mortgage reached an 11-month high of 6.58% last week, a 60 basis point increase since late February. This rise in mortgage rates, which track U.S. Treasury yields, could further diminish homeownership affordability for many.
The National Association of Home Builders estimates a significant housing shortfall of approximately 1.2 million units. Monthly home prices experienced notable increases in the East South Central and Mountain regions, with gains also reported in several other areas. Prices declined in the Pacific and East North Central regions. On a year-over-year basis, prices increased in eight census divisions, though they fell 0.3% in the Pacific region.