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Rate WatchFed funds 3.75%–4.00%30-yr fixed 7.18%15-yr fixed 6.57%as of

home prices

Home prices rose 0.3% in May, FHFA says, still trailing inflation

The FHFA index is up 2.2% from a year earlier, and Case-Shiller shows a slower 1.1%. Both gains run well behind 4.1% inflation as mortgage rates climb and new homes pile up.

By American Policy WireFiled

Rate WatchAs of
MeasureRate
Fed funds targetFOMC range3.50%–3.75%
30-year fixedFreddie Mac PMMS avg.6.58%
15-year fixedFreddie Mac PMMS avg.5.96%
Sources [7], [5]

The bottom line Home prices are still rising on paper but losing ground to inflation, while mortgage rates drift higher and unsold new homes stack up, which shifts some bargaining power toward buyers.

2.2%. That is how much home prices rose in the year through May, by the Federal Housing Finance Agency’s measure, after a 0.3% gain from April [1]. The increase runs about half the pace of overall inflation, and it came as mortgage rates kept rising [6, 5].

Why it matters: FHFA’s flagship index uses seasonally adjusted, purchase-only data from Fannie Mae and Freddie Mac, so it tracks sales financed with conforming loans [1]. A second gauge released the same morning, the S&P Cotality Case-Shiller national index, shows even slower growth [3]. Owners are still gaining equity on paper, but slowly, and in the Pacific division not at all [1].

How we got here: April was the soft spot. FHFA first reported a 0.1% monthly decline for April and a 2.0% annual gain, and it left that April drop unrevised on Tuesday [2, 1]. Rates moved the wrong way for buyers in the meantime. The 30-year fixed went from 6.37% in Freddie Mac’s survey for May 7 to 6.58% on July 23 [5].

By the numbers

  • 0.3% and 2.2%: FHFA’s monthly and annual gains for May [1].
  • 1.1%: The Case-Shiller national annual gain for May, up from 0.9% in April. The 20-city composite rose 1.6% and the 10-city 2.4% [3].
  • 4.1%: The 12-month rise in the PCE price index for May, the Fed’s preferred inflation gauge [6].
  • $398,300: The median price of a new home sold in June, 2.7% lower than a year earlier [4].
  • 9.3 months: The supply of new homes for sale at June’s sales pace, with 485,000 on the market [4].

Where are home prices falling? The West Coast. FHFA’s Pacific division fell 0.6% in May and is down 0.3% from a year ago [1]. The Middle Atlantic division posted the strongest annual gain, 4.5%, and East South Central had the biggest monthly jump, 1.4% [1].

Case-Shiller’s metro data tells a similar story. Chicago led its 20-city index with a 6.9% annual gain, followed by New York at 4.2% and Cleveland at 3.1% [3]. Las Vegas fell 1.9%, and Seattle and Denver each fell 1.8% [3].

“May’s data suggests that U.S. home prices continue to decline in real terms,” said Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices [3]. “Affordability remains a significant headwind for the housing market,” she said [3].

New-home prices fell. New single-family homes sold at a seasonally adjusted annual rate of 628,000 in June, up 1.6% from May and 5.6% below June 2025 [4]. The average new-home price fell 9.5% in a month, to $475,400 [4]. The median fell 3.3% from May’s $412,000 [4]. Inventory has barely moved: 485,000 homes were for sale at the end of June, compared with 486,000 in May and 501,000 a year earlier [4].

What it means for buyers and owners:

  • New homes are the softest corner. Builders have 9.3 months of supply and a median price below last year’s [4]. Both national price indexes, by contrast, still show gains in dollar terms [1, 3].
  • Borrowing costs rose too. Slower price gains have not offset rates: the 30-year average is 21 basis points higher than in early May [5]. It does sit 16 basis points below the 6.74% of a year earlier [5]. The 15-year fixed averaged 5.96% on July 23 [5].
  • Location matters more than the national number. An owner in the Pacific division has lost value over the year, while one in the Middle Atlantic has gained 4.5% [1].
  • The Fed’s rate is not the mortgage rate. The federal funds range has stayed at 3.50% to 3.75% while the 30-year average climbed [7, 5].

What’s next: The Federal Reserve announces its July decision Wednesday, as covered in our preview of this week’s meeting. FHFA publishes June and second-quarter house prices on August 25, the same day the Census Bureau releases July new home sales [1, 4]. Starting with that release, FHFA adds quarterly indexes for 13 large metro areas made up of CBSA divisions [1].

The other side: The monthly figures are noisy. The Census Bureau’s own estimate puts June’s sales change at 1.6% plus or minus 14.8%, so it cannot say whether sales actually rose, and it notes that a trend for new homes takes four months to establish [4]. On a seasonally adjusted basis, the Case-Shiller national index slipped 0.05% in May even as the FHFA gauge rose [3, 1].

Q&A Quick answers

Q1How much did home prices go up in May 2026?
FHFA's seasonally adjusted index rose 0.3% from April and 2.2% from May 2025 [1]. The S&P Cotality Case-Shiller national index showed a smaller 1.1% annual gain [3].
Q2Are home prices falling in 2026?
Not in dollar terms nationally: both major indexes rose from a year earlier [1, 3]. Adjusted for inflation they are falling, since PCE prices rose 4.1% over the same span, and the Pacific division is down 0.3% year over year even before inflation [6, 1].
Q3What is the median price of a new home in June 2026?
$398,300, the Census Bureau and HUD estimate, which is 2.7% below June 2025 [4].
Q4When is the next FHFA house price index released?
August 25, 2026, with monthly data through June and quarterly data for the second quarter [1].
Q5Which housing markets had the biggest price gains in May 2026?
Among Case-Shiller's 20 metros, Chicago led at 6.9% year over year, ahead of New York at 4.2%; Las Vegas fell the most, at 1.9% [3].