US Home Prices Increase 6.7% Year-Over-Year in August

On Tuesday, Redfin reported that US home prices grew 0.5% in August on a seasonally adjusted basis, the largest month-over-month increase since April. Year-over-year, home prices rose 6.7%, the lowest annual increase since January.

Redfin believes that home prices continue to rise in part because there are not enough homes for sale. Housing supply is up 16.7% from a year ago but is still down almost 30% from pre-pandemic levels.

Commenting on the report, Redfin Senior Economist Sheharyar Bokhari said:

“Prices kept creeping up during this unusually slow summer for home sales as mortgage rates came down and supply remained stubbornly low. If mortgage rates fall further this fall—and we expect they will—price growth will likely pick up as more prospective homebuyers come off the sidelines.”

Mortgage affordability could improve as soon as Wednesday, depending on how much the Federal Reserve cuts interest rates.