Home Prices See Largest Increase In Four Months

Home prices are gaining traction as mortgage rates continue their descent, according to a recent report from Redfin. 

U.S. home prices grew by 0.5% in August on a seasonally adjusted basis, making the highest monthly jump since April. On an annual basis, prices rose by 6.7% – the lowest annual increase since January. 

Housing inventory remains 30% below pre-pandemic levels, despite the fact that supply is up 16.7% year-over-year.

“Prices kept creeping up during this unusually slow summer for home sales as mortgage rates came down and supply remained stubbornly low,” Redfin Senior Economist Sheharyar Bokhari said in the report. "If mortgage rates fall further this fall – and we expect they will – price growth will likely pick up as more prospective homebuyers come off the sidelines."

Among the 50 most populous metropolitan areas analyzed by Redfin, 20 (40%) recorded prices dropping on a seasonally adjusted basis in August. The steepest decline was in San Antonio, TX (-2.4%), followed by Warren, MI, (-0.9%) and Oakland, CA (-0.7%). 

The highest month over month price gains took place in Philadelphia (1.5%), Detroit (1.3%), and Providence (1.2%).

The Intercontinental Exchange (ICE) indicated in its September 2024 Mortgage Monitor Report that along with a general cooling in home price growth, rates falling below 6.5% made August the most affordable month for housing since February.