List prices see sharpest annual decline in nearly a decade
Falling prices, an uptick in pending sales and fewer price cuts could mean sunny months are ahead for the market — if inflation, mortgage rates stabilize.
Key points:
- Realtor.com reported that national median list prices dropped by 2.4% year-over-year in May to $429,500, with declines seen in all four U.S. census regions.
- The share of listings with price reductions was also down, suggesting that sellers are adapting to the more buyer-friendly market and pricing accordingly.
- “It’s too early to declare the spring market has fully weathered the storm,” said one economist, but signs are positive — if macroeconomic conditions don’t trend negative.
Median list prices saw the largest decrease in at least nine years in May, according to Realtor.com's latest monthly housing report, as homesellers adjusted their expectations to keep buyers interested this spring.
Economists said falling list prices plus other positive factors, like increased inventory in some regions and fewer price cuts, are all signs of a normalizing market — but it's still too early to determine if it will last into summer.
Prices fell — but market isn't 'crashing'
The median list price in the U.S. dropped 2.4% year-over-year — the biggest percentage decline since Realtor.com first started tracking it in 2017 — to $429,500, the May report found.
At the same time, the share of active listings with a price cut was 17.5%, down from 19.1% during the same period the previous year, suggesting that more homes are being listed at prices buyers can tolerate.
"In a crashing market, sellers list optimistically and get forced to cut," Realtor.com Senior Economist Jake Krimmel said in the report.
In today's market, however, "sellers are using current market conditions as price discovery from the start," Krimmel noted — an indication that "sellers have internalized the more buyer-friendly conditions and are adjusting price expectations before listing rather than after."
Meanwhile, pending sales rose for the sixth month in a row and new listings reached their highest level since 2022.
A 'new equilibrium'
Realtor.com Chief Economist Danielle Hale echoed Kimmel's assessment, noting that the May market movement is a sign that sellers are adapting to market conditions — despite higher mortgage rates and geopolitical instability.
"We've seen six months of sellers adjusting their expectations and buyers rewarding them for it," Hale said in the monthly report.
"List prices are down at a record pace, but price reductions are also down. That combination tells you sellers are doing their homework before listing, not after. The market is finding a new equilibrium."
Uniformity across regions
List price declines were seen across all four major geographic regions in the U.S., Realtor.com reported.
Median list prices were down 4.0% annually in the West, 2.5% in the South, 1.8% in the Northeast and 1.2% in the Midwest.
Bucking the trend of falling supply in recent years, the Northeast saw a significant spike in new listings of 8.6% year-over-year while the Midwest also saw new listings grow 4.7% annually. Meanwhile, in the South and West, where new and active listings have seen steady growth in recent years, they were relatively flat in May.
Looking ahead
While the data suggests buyers and sellers can adapt to shifting market conditions, it's not clear how long that resilience can last if factors like inflation and mortgage rates continue to move in a negative direction, Realtor.com economists cautioned.
Factors to watch in the next month include inventory levels in the Northeast and Midwest, deslistings and contract cancellations — which have been lower compared to 2025.
"It's too early to declare the spring market has fully weathered the storm, but the leading indicators are holding," Krimmel said.