US Existing-Home Prices Continue to Edge Higher in January

On Tuesday, Redfin released its latest Redfin Home Price Index (RHPI) covering a three-month period ending on January 31st. According the RHPI, US home prices climbed 0.5% month-over-month in January, replicating the 0.5% gain in both December and November. On a year-over-year basis, prices jumped 6.7%—the largest increase in a year.

New listings fell 1.2% month-over-month on a seasonally adjusted basis, the first drop since June, and remained far below pre-pandemic levels, contributing to the increase in prices. Redfin says listings are declining largely because many homeowners are hesitant to give up their rock-bottom mortgage rates; a majority of homeowners still have rates below current levels.

Commenting on the results of the RHPI, Redfin Senior Economist Sheharyar Bokhari said:

“Price growth held steady last month because many of the home purchases that closed in January were negotiated at the end of last year, when mortgage rates posted the biggest drop since 2008. The decline in rates gave buyers more purchasing power, and for some, a sense of urgency to lock in a mortgage. Prices also climbed because there’s still a shortage of homes for sale, which is fueling competition in some areas.”