US real estate prices rose 0.2%

According to technology-based real estate brokerage Redfin, U.S. home prices rose 0.2% in July on a seasonally adjusted basis for the second month in a row, the smallest month-over-month increase since January 2023.

Year-over-year, home prices rose 6.8 percent in July, down from 7.3 percent in June. This is the lowest annual increase since January.

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

Home prices continue to rise to all-time highs – albeit at a slower pace than in previous months – because there are still too few homes on the market relative to buyer demand. Mortgage rates have fallen significantly in recent weeks, but this has not yet translated into a significant increase in buyers, which in turn has prevented prices from rising more quickly.

“There aren't enough sellers listing their homes to cause prices to drop, and there aren't enough buyers to create competition that drives prices up significantly,” said Sheharyar Bokhari, senior economist at Redfin. “Relatively low sales and gradual price increases each month will remain the status quo until one of those things changes.”

Metropolitan Summary: Redfin Home Price Index, July 2024

Twenty (40%) of the 50 most populous U.S. metropolitan areas reported a month-over-month decline in home prices in July, on a seasonally adjusted basis. This number is higher than in February, when only four metropolitan areas reported a month-over-month decline.

The largest decline in July was in Austin, Texas (-1.6%), followed by San Francisco (-1.1%) and Nassau County, New York (-0.7%). The largest month-over-month increases were in Indianapolis (1.2%), Miami (1.2%) and San Antonio, Texas (1.1%).