Redfin Reports US Home Prices Increased for Third Consecutive Month in September

On Tuesday, Redfin reported that US home prices grew 0.5% month-over-month in September on a seasonally adjusted basis. This is the fastest pace since April and the third consecutive month where the growth rate has increased.

On a year-over-year basis, home prices rose 6%, the lowest annual increase since December. 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.

Redfin notes that mortgage affordability improved in September when rates dropped as low as 6.08%, but home prices are continuing to tick up because demand outweighs supply.

According to Redfin data, 13 of the 50 most populous metro areas recorded a seasonally adjusted month-over-month drop in home prices in September.

In remarks accompanying the report, Redfin Senior Economist Sheharyar Bokhari said:

“There are around 20% fewer homes on the market today than there were five years ago, mainly because so many homeowners locked in a low mortgage rate during the pandemic. With mortgage rates back above 6.5% this month—and unlikely to drop below 6% this year—home prices will likely continue their consistent climb until more inventory comes onto the market in the spring.”