Israel’s inflation cools in May as home prices fall again

Israel’s Consumer Price Index fell 0.3% in May 2026 from April, while the annual inflation rate for the 12 months through May remained at 1.9%. The sharpest monthly declines were in fresh fruit, down 4.9%, transportation, down 2.7%, and furniture and home equipment, down 0.1%.

The Central Bureau of Statistics said rent for tenants who renewed their leases rose 2.5%, slightly below April’s 2.6%. For new tenants, rent jumped 6.8%, after a 3.6% increase the previous month. The bureau noted these figures are only an approximation of annual rent changes, since most tenants keep the same rent under fixed lease contracts. It also said that in the first quarter of 2026, prices rose for cleaning services by 6.1%, advertising services by 4.9%, employment services by 2.2%, accounting services by 1.6%, and legal services by 1.0%, while management consulting fell 0.3% and computer programming and related services dropped 1.2%.

Separately, housing prices resumed their decline in April 2026, falling 0.3% after rising 0.3% in March and falling 0.1% in both January and February. On an annual basis, prices were down 1.3% from April 2025 to April 2026. New-home prices also edged down 0.1% in April, or 0.7% excluding subsidized government transactions, and were down 3.9% year over year.

By region, Jerusalem led the monthly declines with a 2% drop in home prices, while Tel Aviv rose 0.7%. Haifa fell 1.9%, the Center rose 0.2%, the South fell 0.9%, and the North fell 0.2%. The bureau also published its annual land-price index, showing a 4.9% decline in 2025 after a 15.2% jump in 2024. The land index includes a 3.9% drop in land for dense construction and an 18.1% drop in land for single-family housing.