WASHINGTON — Existing-home sales rose in May to their highest level since October 2022, driven by a temporary decline in mortgage rates earlier this spring and a growing supply of homes on the market, according to a National Mortgage Professional analysis of new Redfin data.
The analysis found that seasonally adjusted existing-home sales increased 2.8% from April to an annualized rate of 4.53 million units. Combined sales of existing and newly built homes rose 3.8% month over month to 308,446 transactions, also the strongest pace since October 2022.
The gains followed a period in April when mortgage rates dipped into the low-6% range, allowing many buyers to secure financing before rates moved higher again. The average rate on a 30-year fixed mortgage was 6.44% in May.
However, the report suggested the housing market’s momentum may be slowing as borrowing costs rise.
Pending Home Sales Barely Post Increase
Pending home sales, which measure contracts signed rather than completed transactions and are considered a leading indicator of future activity, increased just 0.1% from April.
According to Redfin economists cited in the National Mortgage Professional analysis, the divergence between closed sales and pending sales underscores the housing market’s sensitivity to mortgage rates. The stronger May sales figures largely reflected contracts signed in April when rates were lower, while the flat pending-sales data suggests higher financing costs are already weighing on buyer demand.
The report also found that housing inventory continued to improve.
New listings increased 1.4% from April to 396,181 properties, the highest level since 2022, while active inventory climbed to nearly 1.48 million homes, the highest level since 2020.
Strong Demand, But More Options
Redfin said many homeowners listed properties in response to stronger buyer demand during April, hoping to take advantage of increased market activity. The larger inventory gave prospective buyers more options and additional negotiating leverage.
Despite the increase in available homes, the market showed signs of becoming somewhat more competitive.
Just under 60% of homes sold below their original asking price in May, marking the sixth consecutive monthly decline in that measure. Sellers also appeared to be pricing homes more realistically, with the median price of newly listed homes remaining essentially unchanged from April.
Meanwhile, the median U.S. home sale price rose 2% from a year earlier to $398,771.
A Mixed Picture
The report painted a mixed picture for the housing market as it enters the second half of 2026.
While lower mortgage rates earlier in the spring helped unlock pent-up demand and produce the strongest sales pace in nearly four years, the flat pending-sales figures suggest buyer activity remains highly sensitive to changes in borrowing costs.
According to the National Mortgage Professional analysis, the May sales surge may prove temporary if mortgage rates remain elevated, as even modest increases in financing costs continue to influence consumer demand and housing-market activity.
