U.S. Home Prices Rose 0.5% in August, the Biggest Increase in 4 Months

• Home prices grew 0.5% month over month in August, the fastest pace since April.
• On a year-over-year basis, home prices rose 6.7%, the smallest annual increase since January.
• 20 of the 50 most populous U.S. metros recorded a drop in home prices month over month.

U.S. home prices grew 0.5% in August on a seasonally adjusted basis, the largest month-over-month increase since April.  On a year-over-year basis, home prices rose 6.7%, the lowest annual increase since January. 

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This is according to the Redfin Home Price Index (RHPI), which uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes. The RHPI measures sale prices of homes that sold during a given period, and how those prices have changed since the last time those same homes sold. It’s similar to the S&P CoreLogic Case-Shiller Home Price Indices but is published more than one month earlier. August data covers the three months ending August 31, 2024. Read the full RHPI methodology here.

Home prices continue to rise in part because there aren’t enough homes for sale.  Housing supply is up 16.7% from a year ago, but is still down almost 30% from pre-pandemic levels. 

“Prices kept creeping up during this unusually slow summer for home sales as mortgage rates came down and supply remained stubbornly low,” said Redfin Senior Economist Sheharyar Bokhari. “If mortgage rates fall further this fall—and we expect they will—price growth will likely pick up as more prospective homebuyers come off the sidelines .”

Mortgage affordability could improve as soon as tomorrow, depending on how much the Federal Reserve cuts interest rates. 

Metro-Level Summary: Redfin Home Price Index, August 2024

Twenty (40%) of the 50 most populous U.S. metro areas recorded a seasonally adjusted drop in home prices in August, month over month. 

The biggest decline in August was in San Antonio, TX (-2.4%), followed by Warren, MI (-0.9%) and Oakland, CA (-0.7%). The highest month over month gains were recorded in Philadelphia (1.5%), Detroit (1.3%), and Providence, RI (1.2%).

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