Slow price growth is due to a shortage of housing inventory and limited buyer competition, according to a report released by Redfin on Tuesday.
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A report released by Redfin on Tuesday showed that U.S. home sales prices rose 0.2% for the second consecutive month in July, which was the smallest monthly increase since January 2023.
While a shortage of housing inventory is causing prices to rise, limited buyer competition is slowing growth. Redfin said inventories have improved recently but are still about 30% below pre-pandemic levels.
“There aren’t enough sellers listing their homes to push prices down, and there aren’t enough buyers to create competition to push prices up significantly,” said Sheharyar Bokhari, senior economist at Redfin. “Relatively low sales volume and gradual The rising prices will continue to be what they are on a monthly basis until one of those things changes.”
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Despite recent declines in mortgage rates, which typically spur buyer demand and accelerate price increases, home sales prices continue to rise, albeit at a slower pace.
The Redfin Home Price Index (RHPI) showed that home prices increased by 6.8% annually in July, down from 7.3% in June and marking the lowest annual increase since January.
The RHPI, which uses a repeat-sales pricing method to calculate seasonally adjusted changes in single-family home prices, found that 20 of the 50 largest U.S. metropolitan areas experienced seasonally adjusted month-over-month declines in home prices in July. The number of subways has increased.
The largest declines in July were in Austin, Texas (-1.6%), San Francisco (-1.1%), and Nassau County, New York (0.7%). The highest quarterly increases were in Indianapolis, Indiana (1.2%), Miami (1.2%) and San Antonio (1.1%).
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