The US housing market did something interesting in May. It shrugged off higher borrowing costs and kept moving. Existing home sales rose 3.2% to a seasonally adjusted annualized rate of 4.17 million units, according to the National Association of Realtors, while the national median existing home price landed at $429,300, up 1.3% year-over-year.

Meanwhile, key regional markets like Dallas-Fort Worth posted even stronger price gains. The DFW metro area’s median home price hit $395,000, a 2.6% increase compared to the same month last year, based on Zillow and NTREIS data.

Rates went up, sales didn’t go down

Mortgage rates rose to approximately 6.53% during May, up from 6.30% earlier, pushed higher by a cocktail of geopolitical uncertainty and sticky inflation.

Pending home sales showed six consecutive months of year-over-year increases. New listings also inched higher, suggesting that some homeowners who had been clinging to their sub-4% pandemic-era mortgages are finally starting to let go.

The inventory problem hasn’t gone away

Tight supply has been the defining feature of the US housing market for years, and while new listings have started to creep upward, the overall picture remains constrained. In a normal market, rising rates would pressure prices downward as fewer buyers could qualify for mortgages. But when there simply aren’t enough homes to go around, sellers retain pricing power.

What this means for household wealth and market strategy

For the roughly two-thirds of American households that own their home, every percentage point of price appreciation translates directly into net worth gains. A 1.3% national increase on a $429,300 median price means the typical homeowner added about $5,580 in equity over the past year.

For prospective buyers, the combination of a $429,300 median price and a 6.53% mortgage rate puts the monthly principal and interest payment on a conventional 30-year loan with 20% down at roughly $2,175. That’s before property taxes, insurance, and maintenance. Compare that to just a few years ago when the same home at a 3% rate would have cost about $1,450 per month.

A DFW market posting 2.6% gains versus the national average of 1.3% tells you that the “where” still matters enormously in real estate.