SYDNEY Australian home prices rose for the third consecutive month in May, with the pace of growth accelerating sharply as demand remained strong despite high mortgage rates, and the number of available homes nudged lower.

Figures from property consultant CoreLogic released on Thursday showed national home prices surged 1.2% in May after rising in March and April, and finding a floor in February.

The report showed the rise in prices was because of persistently low levels of available housing supply running up against rising housing demand.

"With such a short supply of available housing stock, buyers are becoming more competitive and there's an element of FOMO (fear of missing out) creeping into the market," CoreLogic Research Director Tim Lawless said.

Advertised listings trended lower through May compared with April, with about 1,800 fewer homes listed in the state capital cities. Inventory levels are down 15.3% than they were at the same time last year.

That has resulted in a bump in prices amid increased competition among buyers, with auction clearance rates trending higher, holding at 70% or above over the past three weeks.

Sydney continued to lead the national recovery trend, posting a 1.8% lift in prices, clocking the highest monthly gain since September 2021, with the typical home in Australia's largest city now worth A$48,390 ($32,823) more since January.

Brisbane jumped 1.4% and Perth 1.3%, while Melbourne and Adelaide added 0.9% each, and Canberra 0.4%.

($1 = 1.4743 Australian dollars)

(Reporting by Renju Jose in Sydney; Editing by Jamie Freed)