Zillow's May Market Report: The housing recovery is back on pause

About this update from Zillow Group, Inc.

New listings and sales fall behind 2025 as mortgage rates rise past 6.5%SEATTLE, June 4, 2026 /PRNewswire/ -- Home sales and new listings fell behind last-year levels in May as mortgage rates steadily rose, according to the Zillow® May Market Report. New listings have historically peaked in May or June but sellers pulled back this May; new listings ticked down 0.8% month over month, and now stand 4.1% lower than last year.Sales trended up from April, rising 4.8% month over month, but fell off the historic trend line, declining 2.9% from last year.Meanwhile, inventory growth continued to rise on an annual basis, extending an unbroken streak of annual growth to 30 straight months. However, the pace slowed and is trending toward negative, inching up 1% from last year.Typical home values rose slightly (0.6%) on a monthly basis to $368,720. Combined with higher mortgage rates, that brought the cost of a typical mortgage to $1,861, rising 1.1% from April to May. However, mortgage rates remain lower than last year — even with a 0.8% annual growth in home values, typical mortgage costs are still 3.1% lower than last May."May housing results were disappointing for those hanging on to hope of a stronger year for sales," said Mischa Fisher, chief economist at Zillow. "Inventory is rising, but weekly data suggests it could flatline in the next four weeks. A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year."Home Values & Mortgage PaymentsThe typical U.S. home value is $368,720.The Zillow Home Value Index (ZHVI) rose 0.6% month over month in May.Home values are 0.8% higher than a year earlier.The monthly mortgage payment on a typical U.S. home is $1,861, assuming a 20% down payment and excluding taxes and insurance. That is 3.1% lower than last year.InventoryThere were 1.36 million homes for sale nationwide in May.Active inventory was 1% higher than a year earlier. Inventory rose 4.6% from April.New for-sale listings totaled 422,956 in May, down 4.1% from a year earlier and down 0.8% from April.Sales341,929 homes were sold in May, according to the preliminary Zillow sales count nowcast. That is 2.9% lower than a year earlier and up 4.8% from April.CompetitionHomes took a median of 18 days to go pending in May. That was one day longer than a year earlier and one day...

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