Home prices in May increased 3.6 percent year-over-year to a median of $315,700, according to Redfin.
Redfin said May’s increase in home prices was the biggest annual home price increase in seven months.
According to the report, only six of the 85 largest metropolitan areas Redfin tracks saw year-over-year declines in their median sale price in May. Those places were San Jose, Calif. (-6 percent); New York (-2.5 percent); Honolulu (-2.2 percent); Orange County, Calif. (-1.4 percent), Los Angeles (-0.8 percent); and Oakland (-0.7 percent).
“As mortgage rates have fallen this month, Redfin has seen upticks in the number of people wanting to talk with our agents about buying homes and the number going on home tours,” Redfin Chief Economist Daryl Fairweather said in a release. “Recent surges in mortgage applications also reflect the impact low rates are having on homebuyer demand nationwide.
“We haven’t yet seen a commensurate increase in U.S. home sales, and I don’t expect sales to increase substantially in the long run,” Fairweather said. “That’s because there still aren’t enough homes for sale for all of the people who want to buy homes. In May, inventory posted its smallest increase in eight months, and fewer new listings came on the market than last year. Low rates and rising prices will likely lure sellers onto the market this summer, but the lack of new construction will continue to hold back sales growth.”
Redfin said the number of homes for sale as of the end of May was up 2.5 percent from the same time last year, the smallest year-over-year increase in home supply in eight months. The number of homes newly listed for sale last month fell 0.7 percent from a year earlier.
The share of homes sold above list price in May was 24.4 percent, down from 28 percent one year ago.