Rebecca Noble | Bloomberg | Getty Images Home prices in May were 19.7% higher than the same month last year, according to the S&P CoreLogic Case-Shiller National Home Price Index. This is the second month of slower gains as the housing market cools due to higher mortgage rates and growing concern about inflation. In April, the annual gain was 20.6%. The 10-city composite rose 19% year-over-year, up from 19.6% the previous month. The 20-city composite rose 20.5%, up from 21.2% in April. The cities with the strongest gains were Tampa, FL, Miami and Dallas, with year-over-year increases of 36.1%, 34% and 30.8%, respectively. Four of the 20 cities reported higher price increases in the 12 months ending in May compared with the 12-month period ending in April. As of February this year, all 20 cities in the survey are seeing rising annual profits. “Despite the slowdown, growth rates are still extremely robust, with all three composites at or above the 98th percentile historically,” Craig Lazzara, chief executive of S&P DJI, said in a statement. “We have previously noted that mortgage financing has become more expensive as the Federal Reserve raises interest rates, a process that was continuing as our data was compiled in May. Therefore, a more challenging macroeconomic environment may not support exceptional growth in house prices for much longer,” he added. Mortgage rates have been rising steadily since January of this year, when the average 30-year fixed rate hovered around 3%. It jumped to just over 6% in June and has since fallen to around 5.75%. Given the recent inflation in house prices, which have increased by 40% since the start of the coronavirus pandemic, the rapid rise in interest rates has hit affordability hard. Potential buyers have been sidelined. “In the short term, transactions are feeling the squeeze, with existing home sales down for five straight months. Plus, with less competition, homes that would have gone off the market within hours last year are delayed,” said George Ratiu. , director of financial research at Realtor.com. “The share of homes seeing price reductions has doubled from a year ago as homeowners look to close a deal before more buyers exit the market.”