Despite persistent affordability challenges and elevated interest rates, home prices continued to climb modestly through the early part of this year, according to our latest State of the Nation’s Housing report. However, high costs and rapidly rising for-sale inventories have led to more recent declines in home prices (Figure 1). Nationally, prices rose by just 2.2 percent year over year in May, compared to 5.9 percent the year prior, and fell on a monthly basis for the third consecutive month (Figure 1). Even with this downtick, national home prices are still 57 percent higher than in 2019 but price trends are beginning to diverge in markets across the country. Prices are declining in a growing number of markets where inventories have soared while they continue to climb in markets where for-sale inventories remain tight.
