The May 2026 housing market produced a string of macro shifts. The Federal Reserve got a new chair, Kevin Warsh. Mortgage rates rose during the month, climbing from 6.36% to 6.53%. Inflation hit a three-year high. Locally, May was another strong month for Northwest Philadelphia and Montgomery County.
A New Fed Chair, and Mortgage Rates Climbing
The Senate confirmed Kevin Warsh as the 17th chair of the Federal Reserve on May 13, 2026, in a 54-45 vote. Warsh took the chair when Jerome Powell's term as chair expired on May 15, though Powell remains on the Board of Governors. Warsh's first FOMC meeting is scheduled for June 16-17.
Mortgage rates went the wrong direction for buyers. The 30-year fixed-rate mortgage averaged 6.53% in the week ending May 28, 2026, according to Freddie Mac, up from 6.36% three weeks earlier. The year-ago rate was 6.89%, so the year-over-year picture is still slightly better, but the spring trajectory has reversed.
The driver, per several market watchers, is inflation tied to the war in Iran. "Mortgage rates have risen sharply since signs of inflation spiked," Kevin Watson, home loan specialist at Churchill Mortgage, told CBS News on May 25.
What Experts Expect From Rates
The consensus from mortgage and credit experts is that rates will stay in the mid-to-upper 6% range for the rest of the year, with upward risk if the Iran conflict continues. Jeff Taylor, a board member of the Mortgage Bankers Association and founder of Mphasis Digital Risk, told CBS News: "Homeowners and buyers should reasonably expect mortgage rates to remain in the mid-to-upper 6% range for the balance of the year, with potential for rates to move into the 7% range if the Iran conflict is protracted."
Nicole Rueth, senior vice president at CrossCountry Mortgage, was sharper on the Fed picture: "The probability of a Fed rate hike by year-end has climbed to 50%. There are no rate cuts currently on the board." Rueth also flagged that real wages just went negative for the first time in three years, meaning inflation is now outpacing wage growth. That squeeze hits first-time buyers and middle-income households the hardest.
The National Picture: A Slight Rebound, but Northeast Lags
April's existing-home sales rose 0.2% month over month, according to the National Association of REALTORS® (released May 11). Sales were unchanged in the Northeast and fell year over year. Nationally, the median sale price hit $417,700, up from $408,800 in March.
NAR Chief Economist Lawrence Yun called the picture mixed: "Despite mixed macroeconomic signals, including a record-high stock market and historically low consumer confidence, home sales were modestly boosted by the continued improvement in housing affordability."
The forward-looking indicator was more encouraging. Pending home sales rose 1.4% in April, and 3.2% year over year, per NAR's May 19 release. Yun on buyer sentiment: "Buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates."
Locally, May Was Another Strong Month
What I've been watching since April held into May. Houses that would have sat for six weeks during the winter are coming off the market in two. Some specific highlights from the May closings:
- Mt Airy closed 18 sales at a $427,500 median, essentially flat against April. DOM held at 10 days. Active and pending inventory grew from 60 to 75 properties heading into June.
- Manayunk closed 13 sales at a $489,000 median, up sharply from April's $324,000. The mix included two sales above $1 million.
- Roxborough led by transaction volume with 42 closings. Median DOM compressed to 8 days from 13 in April and 17 in Q1. The buyer pool here is acting faster than at any point this year.
- Glenside closed 16 sales at a $520,000 median, up from $478,000 in April. DOM held at 6 days.
- East Falls saw a real mix shift, with eight of 13 closings under $300,000. The median dropped to $275,000 from April's $397,000, but the pipeline kept growing.
Across most of these neighborhoods, two patterns held. Days on market stayed compressed or got faster. And pipelines kept growing, suggesting the typical spring supply buildout is happening alongside continued buyer absorption.
What This Means for Buyers and Sellers
For buyers, the message from April has sharper edges in May. Rates are not going to drop materially in the near term, and the chance of a rate cut this year is now in question. The buyers who are succeeding are getting pre-approved at current rates, setting realistic budgets, and being ready to move when the right house appears. Waiting for rates to fall has not been a paying strategy this year.
For sellers, the local DOM compression remains encouraging, but pricing accuracy matters more than ever. The homes that needed price corrections after sitting through January and February eventually sold, but at a discount. Pricing right at the start is still the single most important decision.
There is no substitute for sitting down and looking at the actual comparables for your street. If you want to talk through what your specific block looks like, reach out.
Sources
- Federal Reserve Board. Federal Reserve issues FOMC statement, April 29, 2026.
- Freddie Mac. Primary Mortgage Market Survey, week ending May 28, 2026.
- Yale, Aly J. "Here's what experts say to expect from mortgage rates now that inflation keeps rising." CBS News, May 25, 2026.
- Copyright ©2026 "April 2026 Existing-Home Sales." NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. Accessed June 1, 2026, https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales.
- Copyright ©2026 "April 2026 Pending Home Sales." NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. Accessed June 1, 2026, https://www.nar.realtor/research-and-statistics/housing-statistics/pending-home-sales.
- Local sales data from Bright MLS, May 2026. Aggregated transaction-level data; individual sale details not disclosed.
Henry is a Philadelphia-based REALTOR® serving buyers and sellers in Northwest Philadelphia and Montgomery County, PA. Questions? Get in touch.
Frequently Asked Questions
Did mortgage rates go up in May 2026?
Yes. The 30-year fixed-rate mortgage averaged 6.53% in the week ending May 28, 2026, according to Freddie Mac, up from 6.36% three weeks earlier. The year-ago rate was 6.89%, so the year-over-year comparison is still slightly favorable, but the spring trajectory has reversed.
Who is the new Federal Reserve chair?
The Senate confirmed Kevin Warsh as the 17th chair of the Federal Reserve on May 13, 2026, in a 54-45 vote. He took the chair when Jerome Powell's term as chair expired on May 15, though Powell remains on the Board of Governors. Warsh's first FOMC meeting is scheduled for June 16-17, 2026.
Are mortgage rates expected to drop in 2026?
The consensus among mortgage and credit experts is that rates will stay in the mid-to-upper 6% range for the rest of the year, with upward risk toward 7% if the Iran conflict is protracted. The probability of a Fed rate hike by year-end has climbed to roughly 50%, and there are no rate cuts currently on the board.
How did the Northwest Philadelphia housing market perform in May 2026?
May was another strong month locally. Roxborough led by transaction volume with 42 closings and a median time on market of 8 days. Mt Airy closed 18 sales at a $427,500 median with days on market holding at 10. Manayunk's median jumped to $489,000 and Glenside rose to $520,000. Across most neighborhoods, days on market stayed compressed or got faster while pipelines kept growing.
