Buyers and Sellers Find Their Rhythm in a Steadying Market

May housing data is officially in, and it shows that our quietly positive spring continues to forge ahead, despite navigating some very real economic headwinds.

According to a full rundown on May listing data from my colleague Jake Krimmel, the spring season has delivered some positive developments for buyers. Nationally, listing prices fell year over year for a seventh straight month—dropping by 2.4% in May.

This represents the steepest year-over-year decline in Realtor.com® data going back to 2017. Crucially, homes under contract also rose for a sixth straight month.

This combination tells us that sellers are pricing to sell, and buyers are responding in kind. Rather than pricing too high and being forced to chase buyers down with later price cuts, sellers are adjusting their expectations ahead of listing.

This is an important distinction; it signals a healthier, more realistic market.

Zooming in on our weekly housing data, these trends are holding: Asking prices fell 2.3% year over year, active inventory grew 1.8%, and time on the market was essentially flat. The picture is consistent: a market that is gradually loosening with no dramatic shifts in either direction.

Regionally, May reversed some recent patterns. New listings surged in the Northeast and Midwest, while the South and West saw stalling inventory growth.

New listing activity this week (YoY)

• Northeast: +8.6%
• Midwest: +4.7%
• South: +0.6%
• West: -1.4%
• National: +2.1%

Mortgage rates ease slightly

Pivoting to the financing side, mortgage rates offered a modest reprieve. As covered by Realtor.com senior economists Anthony Smith and Joel Berner in their weekly update, the Freddie Mac 30-year fixed rate came in at 6.48%, down 5 basis points from last week.

The 10-year Treasury yield held below 4.5%, giving mortgage rates space to soften. While conflict in the Middle East is keeping oil shocks and inflation concerns front of mind, rates remain 37 basis points below last year—a meaningful tailwind for spring buyers.

Turning to the broader economic foundation, the May jobs report released on Friday showed that the economy added 172,000 jobs while the unemployment rate held steady at 4.3%, marking a third consecutive month of solid payroll growth. Wage growth came in at 3.4% year over year.

We remain in a low-hire, low-fire labor market that looks increasingly stable. For the housing market, three months of solid job growth is nothing to sneeze at.

However, the headline number isn't what matters most here—it's the race between earnings growth and inflation. That will determine whether consumers gain real purchasing power this summer, which is exactly why I will be watching the consumer price index release on June 10.

A stable labor market gives the Fed one fewer fire to put out, letting policymakers focus squarely on inflation. If the CPI data shows inflation cooling (following April's headline of +3.8% annual increase), it strengthens the case for a Fed easing cycle and lower mortgage rates.

If it comes in hot, expect rates to stay rangebound. Either way, it is the most vital data point on our summer calendar.

For full reports, the Realtor.com Market Clock, and housing data downloads, visit realtor.com/research.