Home Price Growth Steady for a Full Year: Redfin

Rather than a year of living dangerously, it’s been a year of home prices gaining calmly.

Home prices have been on a steady climb, with prices rising 0.5 percent month-over-month in October, according to the Redfin Home Price Index. This increase was the same as reported in September and continues a 12-month trend of moderate price increases ranging from 0.2 percent to 0.7 percent monthly.

The steady growth resembles pricing patterns observed between 2015 and 2020, a stark contrast to the fluctuations during the pandemic, when monthly increases peaked near 2 percent in June 2021 and dropped into the negatives in August 2022.

Home prices increased year-over-year by 5.9 percent, the smallest annual increase since December.

Two key factors are influencing the housing market: elevated mortgage rates and a shortage of available homes. While high interest rates discouraged some potential buyers, the limited housing inventory created competitive conditions that drove prices upward.

Redfin senior economist Sheharyar Bokhari noted a potential shift in the market, suggesting homebuyer demand may increase after the presidential election’s conclusion in early November. That could lead to heightened competition and potential price increases, contingent on the number of new home listings.

Only eight of the country’s 50 most populous metropolitan areas experienced price declines month-over-month in October. San Antonio saw the most significant drop at 2.9 percent, followed by Tampa (1 percent) and Miami (0.6 percent). Conversely, San Francisco experienced the highest month-over-month gain at 2.3 percent, with Detroit (1.5 percent) and Nassau County, New York (1.2 percent) also posting notable increases.

Home sales are expected to hover around their lowest level since 1995, according to data revealed last month by the National Association of Realtors. Again, high prices and elevated mortgage rates are to blame.

The Redfin Home Price Index uses a repeat-sales pricing method to analyze changing values of single-family homes, tracking prices of properties that have been sold multiple times.