In February, US home prices marked their slowest annual growth in six months as buyer demand softened, according to recent insights from a prominent real estate brokerage. The average price of homes increased by 3.2% year-over-year, reaching $425,421, signifying the slowest pace of appreciation recorded in half a year.
Additionally, on a sequential basis, prices saw a modest rise of 1.8%. Milwaukee witnessed an unprecedented surge in home prices, with a remarkable 20% increase compared to the previous year, making it the top performer among 50 metropolitan areas meticulously monitored by the brokerage. Nevertheless, February also saw a decline in home prices across six major metropolitan areas, highlighting the uneven nature of the current housing market. The report indicated that pending home sales fell by 6.2% year-over-year, marking the sharpest decline since September 2023.
Month-over-month, there was a slight drop of 1.1% in pending home sales. Interestingly, despite the dip in homebuyer demand, prices continued to rise due to the persistent shortage of available homes in many regions of the country. This scarcity has compelled buyers to compete more fiercely, thus driving up home prices further. On the supply side, active listings experienced an increase of nearly 11% year-over-year and gained 1.3% sequentially, reaching the highest levels observed since June 2020.
However, it's noteworthy that while inventory levels are rising in various areas, some markets in the Midwest still report decreases in the number of homes available for sale. In fact, out of the five metros where housing supply is declining the quickest, three are situated in the Midwest. In summary, the dynamics of the US housing market reflect a complex interplay between rising prices and cooling buyer demand, coupled with notable regional variations in inventory and sales performance..