Data shows U.S. home prices are growing at their slowest pace in nearly a year and a half redfin tunaHouse price index released on Tuesday.
House prices increased by 0.26% quarterly in May, which was lower than the 0.44% increase in April. Last month’s data was the smallest seasonally adjusted monthly increase since January 2023.
Data from Redfin shows that national home prices rose 7.16% annually in May, down from 7.25% in April.
Looking at a more granular level, 31 of the nation’s 50 largest cities reported monthly home price increases in May, with Detroit posting the largest monthly increase of 3.53%. Meanwhile, Chicago had the largest monthly decline at 2.01%.
Only Austin (-0.51%) saw prices decline on an annualized basis compared to this time last year. Among the other 49 metro areas, Newark, New Jersey had the largest annual increase at 15.69%, followed by Nassau County, New York (+15.65%) and Warren, Michigan (+14.79%).
Redfin attributed the slowdown in home price growth to a less severe housing shortage than a year ago. A slight rise in the number of new home listings has eased some pressure on sales prices as buyers have more choices.
Redfin data shows that new listings in May increased by 0.3% from the previous quarter and 8.8% from the same period last year. Despite these increases, the number of new listings remains about 20% below pre-pandemic levels.
Redfin noted that during the three-month period ending in October 2023, just after the first significant increase in new listings, home price growth began to cool, providing further evidence that an increase in new listings is causing home price growth to slow. August of the year.
Looking ahead, Redfin expects the number of new listings to continue to increase as the impact of the mortgage rate lock fades for home sellers, which is likely to happen if mortgage rates continue to fall.
“We learned last week that inflation continued to cool in May, which means mortgage rates will likely fall in late summer or early fall,” Li Chen, Redfin’s director of economic research, said in a statement.
“Falling mortgage rates will bring both buyers and sellers back into the market, which could either accelerate price increases or drag them down, depending on who comes back more aggressively. If sellers come back faster, prices could It will cool down, but if buyers come back faster, prices may rise.
