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Home prices were up 2.6 percent in July compared to a year ago, according to a new report Redfin released on Thursday.
It was the latest indicator that home prices are on the rise, driven by inventory that had its biggest decline in 18 months, Redfin said.
The typical U.S. home sold for $382,000 for the four weeks ending July 23, according to Redfin. The 2.6 percent increase compared to a year earlier was the biggest rise since November.
Chen Zhao
Redfin economic research lead Chen Zhao called the new data “hopeful,” as there are some signs that home sales could soon start to pick up.
“Avoiding a recession means Americans will hold onto their jobs, for the most part, and feel more confident about purchasing big-ticket items like a house,” Zhao said.
What’s more, inflation continues to fall, easing pressure on the Federal Reserve to continue raising interest rates.
“While mortgage rates will probably stay elevated for at least a few months,” Zhao said, “they’re likely to start coming down before the end of the year.”
The typical mortgage payment was $2,599, Redfin reported, down 2 percent from an all-time high earlier this month thanks to a slight drop in mortgage rates.
“Today’s housing market is unusual because prices are increasing despite lukewarm demand,” Redfin said in its report.
Demand is down 3 percent from a year ago, according to the company’s Homebuyer Demand Index, which measures requests for tours and other homebuying services from Redfin. Mortgage-purchase applications are down 23 percent.
Yet the drop in supply was enough to offset the drop in demand, keeping prices high.
“New listings are down 22% from a year ago, and the total number of homes for sale is down 17%, the biggest decline in a year-and-a-half,” Redfin said.
Biggest sales price increases
- Miami: 11.9 percent
- Milwaukee: 9.3 percent
- Cincinnati: 8.9 percent
Biggest home price declines
- Austin: –8.8 percent
- Detroit: –6.4 percent
- Phoenix: –4.7 percent
Biggest drop in new listings
- Las Vegas: –45.2 percent
- Phoenix: –38.9 percent
- Newark: –34.3 percent
