Home prices reached a new record in May amid an ongoing housing shortage, even as high mortgage rates continued to push affordability out of reach for millions of Americans.

Prices increased 5.9% nationally in May when compared with the previous year, the S&P CoreLogic Case-Shiller index showed on Tuesday, down from the 6.4% pace recorded the previous month.

On a monthly basis, prices climbed 0.3%, according to the index.

“Home prices hit a new high in May,” said Lisa Sturtevant, Bright MLS chief economist. “But with affordability a growing challenge for homebuyers and more new listings coming onto the market, we could be at the peak.”

The 10-city composite, which encompasses Los Angeles, Miami and New York, rose 7.7% annually, compared with an increase of 8.1% in April.

The 20-city composite, which also tracks housing prices in Dallas and Seattle, posted an annual gain of 6.8%, a decrease from the 7.3% figure recorded the previous month.

Prices rose in all the 20 major metro markets tracked by the index.

“All 20 markets observed annual gains for the last six months,” said Brian Luke, head of commodities, real and digital assets at S&P DJI, in a release. “The last time we saw that long a streak was when all markets rose for three years consecutively during the COVID housing boom.”

The largest price gain took place in New York, which recorded a year-over-year increase of 9.4%. It was followed by San Diego and Las Vegas, with respective gains of 9.1% and 8.6%.

Portland, Oregon, once again saw the smallest gain in May, with home prices climbing just 1% from the prior year.

The Case-Shiller index reports with a two-month delay, meaning it may not capture the latest ongoings in the market. 

There are a number of driving forces behind the affordability crisis.

Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.

Higher mortgage rates over the past three years have also created a “golden handcuff” effect in the housing market.

Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.

Economists predict that mortgage rates will remain elevated in 2024 and that they will only begin to fall once the Federal Reserve starts cutting rates.

Even then, rates are unlikely to return to the lows seen during the pandemic.

“Despite an easing of home prices in the second half of 2024, there is no evidence to suggest that we will see a major home price drop nationally,” Sturtevant said. “While on the rise, the inventory of homes for sale is still low by historical standards. Demand will increase this fall as mortgage rates come down.”