SEATTLE – Home sales and new listings fell behind last-year levels in May as mortgage rates steadily rose, according to Zillow’s 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.”

Other findings in the report include:

  • The typical U.S. home value is $368,720.
  • Home values are 0.8% higher than a year earlier.
  • There 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.
  • Homes took a median of 18 days to go pending in May. That was one day longer than a year earlier and one day longer than April. The share of listings with a price cut in May was 23.9%, compared with 25.7% a year earlier and 23.5% in April.
  • 28.4% of homes sold above list price in April, according to the most recent data available, compared with 30.1% a year earlier and 25.4% in March.