Real Estate Market Update: May 2026

The housing market continues to move forward. However, not everyone is moving at the same pace.

Buyer demand is strong, especially in markets with limited inventory, but higher mortgage rates have prompted many cost-sensitive buyers to hit pause on their homebuying journey. 

The national market has mostly favored sellers this spring. While this is a typical trend of the season, Brad Case, chief economist at Homes.com, says that we’re moving out of it. “The process is further along in some areas and not very far along in others,” he explained to CNN.

As we head into the summer market, we're seeing an active, competitive market shaped by affordability.

Here’s what you need to know from the May 2026 housing market!

May Housing Market Trends

The demand is there, but budget-conscious buyers are waiting for mortgage rates to dip.

Existing Homes

Existing home sales increased by 0.2% in April, according to the National Association of Realtors (NAR). There was no change year-over-year. The median home price also increased by 0.9%, reaching $417,700.

According to NAR Chief Economist Dr. Lawrence Yun, home sales were boosted thanks to improved housing affordability. Days on market also continue to lengthen on average, showing that buyers are taking their time before making a decision.

New Construction Homes

Sales of newly built, single-family homes dropped by 6.2% in April, according to a report by the National Association of Home Builders (NAHB). The pace of new home sales is down by 11.3% from a year earlier.

The median new home price was $422,500, up 8% from March and up 2.2% from one year ago. 

There’s still demand, but buyers have pulled back. Bill Owens, chairman of the NAHB, attributes this to higher mortgage rates and gas prices.

Housing Inventory

There was a 5.8% increase in unsold existing home inventory, or about 1.47 million units, equal to 4.4 months’ supply, NAR reported. This is up from 4.2 months last month and up from 4.3 months a year ago.

In the new-construction market, single-family inventory increased by 1.7% from the previous month to 9.4 months’ supply at the current building pace, according to the NAHB. Completed, ready-to-occupy inventory was up 6.1% from last year.

Mortgage Rates

The mortgage rate on a 30-year fixed-rate mortgage was 6.53% as of May 28, 2026, according to Freddie Mac’s Primary Mortgage Market Survey. This is up from last week, but down from 6.89% last year.

Pending home sales increased three months in a row, and Freddie Mac noted that this indicates latent demand, and homebuyers are ready to jump back in if rates decline.

DMV Housing Market Update

Another month of steady growth in the DMV. According to the Northern Virginia Association of Realtors (NVAR), the Northern Virginia housing market experienced rising sales activity, higher home values, and stronger buyer demand.

Closed sales increased by 4.2% compared to April 2025, reflecting buyer activity in a competitive spring market. The median sold price in April increased to $815,000, up 4.6% from the same month last year, driven by rising demand and limited available homes for sale.

Homes spent more time on the market, averaging 18 days in April, up 28.6% from April 2025. Homes are still selling quickly, but the increase suggests that buyers are taking time to consider their options as inventory improves.

Active listings were up by 1.9% in April, and the months supply measured 1.83 months, down 1.1 months compared to last year.

And taking a closer look at the D.C. metro area, Bright MLS reported that, despite economic pressure and continued federal budget cuts, April activity signaled optimism for the housing market. Inventory grew, but remains tight. 

Buyers with the most financial flexibility are in the market, but budget-conscious buyers are waiting for mortgage rates to drop before jumping back in. 

More Single Women Are Buying Solo

According to NAR’s 2026 Home Buyers and Sellers Generational Trends report, more single females are entering the homebuying market alone.

Single females accounted for 25% of recent home buyers, second to married couples at 50%. Thirty-five percent of Gen Z buyers were also single females, the highest share among all age groups. Only 11% of buyers were single males.

“They’re really making a lot of sacrifices to get into homeownership—and that says to me, it’s important to her,” said Jessica Lautz, NAR’s deputy chief economist. “She wants to be a homeowner.”

Tiny Homes Will Soon Be Legal in Virginia

Next year, Virginia homeowners will have an easier time building accessory dwelling units (ADUs), or tiny homes, on their property. 

Gov. Abigail Spanberger signed new legislation that would require local governments to allow ADUs on qualifying single-family residential lots beginning July 1, 2027, according to DC News Now. 

These are small secondary homes, such as an in-law suite or backyard cottage, that can now be used for family housing, rental income, or multigenerational housing. This new law could help families create more affordable housing options for their families or bring in additional income. 

DC News Now reported that the law requires localities to treat ADUs as a by-right use on eligible lots. This limits the requirement for special approvals. However, homeowners must still comply with building codes, utility requirements, septic and sewer system limitations, and other standards.

A detached ADU in Northern Virginia could cost between $100,000 and $300,000, depending on the size, finishes, and site conditions.

Final Thoughts

The housing market is moving in the right direction, but affordability is still the biggest hurdle for many buyers.

Demand is definitely there. Buyers are watching rates closely, inventory is improving, and homes that are priced appropriately continue to attract attention. At the same time, higher borrowing costs have kept some buyers on the sidelines.

As we move into summer, the market is still active, but buyers and sellers are moving with a little more caution.

Looking to buy or sell in the DC area? Don’t navigate the complexities of the current housing market alone! Reach out today for expert real estate leadership.