In August, the dynamics of the U.S. housing market showcased a notable increase in home prices on a sequential basis, although the annual growth rate has decelerated to the slowest pace since January, as reported by Redfin. According to the latest data released by the real estate brokerage, U.S. home prices experienced a 0.5% increase on a seasonally adjusted basis last month.
This marks the most significant rise observed since April. Year over year, home prices surged 6.7%, indicating the lowest annual growth since the beginning of the year. Sheharyar Bokhari, a Senior Economist at Redfin, remarked, "Prices continued their gradual ascent during an unusually sluggish summer for home sales, as mortgage rates decreased and supply remained persistently tight." A previous report from Redfin indicated that active listings rose by nearly 17% year over year for the four-week period ending on September 8.
Nevertheless, this represents a decline of approximately 30% compared to pre-pandemic levels. The latest data shows a drop in the 30-year mortgage rate, which fell to its lowest point since February 2023, settling at 6.2% as of Thursday, according to Freddie Mac. Bokhari further noted, "Should mortgage rates decline further this fall—which we anticipate—they are likely to spur a pickup in price growth as more potential homebuyers re-enter the market.
Additionally, mortgage affordability could improve 'as soon as tomorrow,' contingent on the size of an interest rate cut by the Federal Reserve." The forthcoming two-day meeting of the Federal Open Market Committee (FOMC) is set to begin on Tuesday, with a pivotal decision regarding the benchmark lending rate anticipated on Wednesday.
Current projections indicate a 61% probability that the FOMC will opt for a 50 basis point rate cut, while the remaining likelihood favors a reduction of 25 basis points, as indicated by the CME FedWatch tool. Examining the broader U.S. metropolitan landscape, around 40% of the 50 most populous metro areas witnessed a month-to-month decline in home prices last month.
San Antonio, Texas, experienced the most significant drop, with home prices decreasing by 2.4%, as highlighted in the latest Redfin report. Current Price: $14.05, Change: +$0.41, Percent Change: +3.01. $RDFN.