Data signals a return to familiar ground, says Redfin
Home price growth in the US has now aligned with trends observed prior to the COVID-19 pandemic, according to new data from Redfin.
February saw a 0.6% increase in home prices from the previous month, mirroring the average monthly gain of 0.6% experienced in the eight years before the pandemic’s onset.
This comes after a three-year period during which monthly price changes fluctuated dramatically, reaching a peak increase of 2% in January 2022 and a decline of 0.2% in August 2022.
The year-over-year comparisons in Redfin’s analysis followed a similar pattern, with February data revealing a 6.7% rise in home prices compared to the same month last year, closely approximating the pre-pandemic average annual gain of 6.9%.
In contrast, pandemic data had year-over-year price increases peaking at 22.9% in March 2022 and dipping to a low of 3.4% in June 2023.
Meme Loggins, a Redfin Premier real estate agent based in Oregon, said she has seen home prices plateauing in Portland.
This has led to a mismatch between buyer expectations and seller demands, she said, with buyers wanting discounts and sellers “standing firm” on their prices.
Redfin’s February Home Price Index also highlighted the impact of mortgage rates becoming less volatile than they were before, stating that this has contributed to the stabilization of home prices.
Additionally, while buyer demand is still being dampened by elevated rates, this has not translated into a decrease in home prices, largely due to a persistent shortage in housing supply.
Although new listings have recently increased to their highest level in nearly a year and a half, the supply of housing remains below pre-pandemic levels, according to Redfin.
“Inventory has picked up dramatically in the past two weeks, but it’s getting snatched up quickly,” said Loggins. “Today, I took my clients to see a house that had only been on the market for seven hours—we toured it, they liked it, and I’m about to write an offer.”
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