It is still the tenth successive monthly increase in prices, which is keeping annual growth in double digits.
This put average house prices at £269,914.
Robert Gardner, Nationwide’s chief economist, said: “Despite growing headwinds from the squeeze on household budgets due to high inflation and a steady increase in borrowing costs, the housing market has retained a surprising amount of momentum.
“Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high.
“At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.”
Nationwide is still expecting the housing market to slow as the year progresses.
Gardner added: “Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters if global energy prices remain high.
“Measures of consumer confidence have already fallen towards record lows. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”
Commenting on the figures, Cory Askew, head of sales at Chestertons, said: “The vast buyer demand we have seen since the beginning of the year, has continued into May and surpassed May 2021’s performance when we had the added stamp duty incentive.
“With demand outstripping supply, we have seen a more challenging market for buyers who have been competing against other house hunters which is driving up property prices.
“Compared to May of last year, we registered a 64% uplift in buyer enquiries and 15% increase in offers being made. These statistics indicate that buyer confidence has returned despite economic challenges and that house hunters are eager to find their property before any further interest rate hikes.”
Sarah Coles, personal finance analyst for Hargreaves Lansdown, was more pessimistic and warned the data is the latest sign of a changing market.
She said: “When you add in the Bank of England figures showing mortgage approvals have fallen below the pre-pandemic average, and the Zoopla figures revealing more sellers are cutting prices and properties are taking longer to sell, the market looks like it’s starting to shift.
“The impact of rising prices is gradually taking a toll, and while the jobs market continues to support buyers, wages are falling behind inflation, which will feed into just how much people can afford to spend on a property.
“The mortgage market itself could eventually dent demand, as rates continue to rise.
“We also know that mortgage companies are factoring in higher costs to affordability calculations, which will make it harder to borrow, and that more of their valuers are down-valuing properties, because they don’t think they’re worth what buyers are prepared to pay.
“We’re not expecting a blight to strike the market, because right now, demand is still outstripping supply, which is likely to keep prices from falling. However, over the coming months, we’re likely to see buyers take their time, exercise a bit more caution, and house price rises to slow significantly.”