Homes.com, a leading online residential marketplace within CoStar Group, has released a new report indicating that while U.S. home prices continued to rise in May, the rate of increase has slowed for the fifth consecutive month, coinciding with a significant expansion in housing inventory.
The preliminary data for May shows the median home price increased by a modest 1.0% to $388,829, up $3,829 from $385,000 in May of the previous year. This marks 23 consecutive months of year-over-year price increases, though the pace has notably decelerated from a peak of 5.6% observed in the second half of 2024.
The deceleration in price growth has been consistent, with year-over-year increases slowing from 3.9% in January to 2.7% in February, 2.2% in March, and 1.3% in April, culminating in May’s 1.0% rise. This easing of price pressures is accompanied by a substantial increase in the supply of homes. Homes.com data shows that the inventory of homes for sale climbed 17.2% compared to May 2024, reaching its highest level since October 2019.
The combination of softening price growth and rising inventory suggests a potential transition toward a buyer’s market, particularly in several key metropolitan areas within the Sun Belt region. Despite these shifts, affordability continues to pose a challenge for many prospective buyers due to persistently elevated mortgage rates.
Geographically, the highest rates of price appreciation remain concentrated in the Northeast and parts of the Midwest, although even these markets are experiencing moderation. In April, the top three markets by price growth recorded increases between 10.5% and 10.8%; by May, these rates had slowed to between 7.4% and 7.6%. Conversely, areas exhibiting negative or flat price growth have expanded to include regions in Texas, parts of Florida and California, as well as Denver and Atlanta. Homes.com notes that the data presented in the report are preliminary and may undergo slight adjustments once all home sales for the period are accounted for.
Erika Ludvigsen, National Director of Residential Analytics at Homes.com, is available to provide further insights into these findings and the broader residential real estate market.
Homes.com, a brand of CoStar Group (NASDAQ: CSGP), positions itself as the fastest-growing residential real estate marketplace and the second largest portal in the United States. CoStar Group, founded in 1986 and headquartered in Arlington, Virginia, is a global leader in commercial real estate information, analytics, and online marketplaces, having acquired Homes.com in 2021. The platform focuses on enabling homeowners and their agents to leverage online marketing to connect with potential buyers, reporting that its members secure 58% more listings compared to non-members. In the first quarter ending March 31, 2025, the Homes.com Network, which includes Apartments Network and Land Network, reached an average of 104 million unique visitors monthly.
