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U.S. home sale prices rose 0.2 percent for the second consecutive month in July, representing the smallest monthly gain since January 2023, according to a Redfin report published on Tuesday.
Although a shortage in housing inventory is keeping prices elevated, limited buyer competition is slowing growth. Inventory has recently improved, but it remains around 30 percent lower than pre-pandemic levels, according to Redfin.
“There aren’t enough sellers listing their homes to cause prices to fall and there aren’t enough buyers to create competition to drive prices up significantly,” Redfin Senior Economist Sheharyar Bokhari said. “Relatively low sales and gradual price increases will remain the status quo each month until one of those things changes.”
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Despite a recent drop in mortgage rates, which typically boosts buyer demand and accelerate price growth, home sale prices have continued to rise, albeit at a slower pace.
The Redfin Home Price Index (RHPI) shows that home prices grew 6.8 percent year-over-year in July, down from 7.3 percent in June, marking the lowest annual increase since January.
The RHPI, which uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes, found that 20 of the 50 largest U.S. metro areas saw month-over-month declines in home prices in July on a seasonally adjusted basis, up from just four metros in February.
The steepest declines in July were observed in Austin, Texas (-1.6 percent), San Francisco (-1.1 percent) and Nassau County, New York (0.7 percent). The highest month-over-month gains were seen in Indianapolis, Indiana (1.2 percent), Miami (1.2 percent), and San Antonio (1.1 percent).
