After a brief lull from June 2022 to January 2023, the average listing price for a U.S. home is on the rise again.

Despite elevated mortgage rates, the national median list price grew to $441,000 in May amid constrained home supplies, up from $430,000 in March. That’s the third monthly increase in a row.

Overall home sales dipped in all four regions, falling the most in the West. Affordability remains an issue for most buyers. Despite the rise in asking prices, the nationwide median price paid fell by 1.7% to $388,800. Sales were down more than 23% year-over-year.

According to a May survey of consumer sentiment conducted by Fannie Mae, more people considered it a good time to sell.

However, this sentiment did not translate into more May listings. The number of newly listed homes declined 22.7% compared to the previous year, and new listings remained below pre-pandemic levels.

With mortgage rates nearly double what they were during the pandemic, existing homeowners have less motivation to move from their existing abodes, many of which carry very low mortgage rates.

New listings are down 20% from last spring, and down by nearly 30% from March 2019, before the pandemic.

What happens with mortgage rates the rest of the year will play a strong role in overall sales. Treasury yields suggest lower mortgage rates may be on the way soon. On June 14, the Federal Reserve decided to hold interest rates steady after 10 consecutive hikes.

Most experts predict that within five years, the market will shift to a more balanced state where the negotiating power between buyers and sellers will be more equal.

Analysts foresee relatively stable nationwide prices in 2023 with fluctuations of about 5% possible either direction. This rate of appreciation aligns with the long-term average.

Prospective homeowners frustrated by the last two years of heavy competition may be surprised to know that the inventory of homes for sale is higher than last spring. Due to more homes remaining on the market, the number of homes for sale increased in the 50 largest metro areas compared to the previous year.