Home sales and new listings drop as mortgage rates exceed 6.5%, slowing the housing market in May 2026

In May 2026, U.S. home sales and new listings declined compared to last year, influenced by rising mortgage rates surpassing 6.5%. New listings fell 4.1% year-over-year, and sales dropped 2.9%, despite a slight monthly sales increase. Inventory growth continued but slowed, with typical home values rising modestly to $368,720, pushing mortgage costs slightly higher. Experts suggest this trend may lead to slower sales in the latter half of the year as buyer options peak early.