U.S. Home Prices Rose 0.5% in August
In August 2024, U.S. home prices experienced a notable increase of 0.5% month over month, marking the most significant rise since April. On a year-over-year basis, home prices rose by 6.7%, which is the smallest annual increase since January. This data comes from the Redfin Home Price Index (RHPI), which employs the repeat-sales pricing method to calculate seasonally adjusted changes in the prices of single-family homes. The RHPI is similar to the S&P CoreLogic Case-Shiller Home Price Indices but is published more than a month earlier. The August data covers the three months ending August 31, 2024.
Despite the rise in home prices, the housing supply remains constrained. Although housing supply is up 16.7% from a year ago, it is still down nearly 30% from pre-pandemic levels. This limited supply continues to drive prices upward. Redfin Senior Economist Sheharyar Bokhari noted that prices have been creeping up during an unusually slow summer for home sales, partly due to mortgage rates coming down and supply remaining low. Bokhari also suggested that if mortgage rates fall further in the fall, price growth is likely to pick up as more prospective homebuyers enter the market.
Mortgage affordability could see improvements soon, depending on the Federal Reserve's decisions regarding interest rate cuts. The potential for lower mortgage rates could make home buying more accessible for many.
On a metro level, 20 out of the 50 most populous U.S. metro areas recorded a seasonally adjusted drop in home prices in August. The most significant declines were observed in San Antonio, TX (-2.4%), Warren, MI (-0.9%), and Oakland, CA (-0.7%). Conversely, the highest month-over-month gains were seen in Philadelphia (1.5%), Detroit (1.3%), and Providence, RI (1.2%).
Mark Worley, the author of the article, is a data journalist who explains various economic factors impacting the housing market. Before joining Redfin, he worked in content operations at Dataminr and held reporting and editing roles in Australia, Southeast Asia, and the Middle East.
