Redfin Home Price Index: Prices Rose 0.6% in February, Marking Return to Pre-Pandemic Norm
March 19 2024 - 8:00AM
Business Wire
While mortgage rates remain elevated, they’re
not as volatile as they were at the height of the pandemic, which
has helped stabilize home price growth
(NASDAQ: RDFN) — Home price growth is finally back to where it
was before the pandemic, according to a new report from Redfin
(redfin.com), the technology-powered real estate brokerage. This
follows a three-year rollercoaster ride in which prices soared when
ultra-low mortgage rates fueled a homebuying frenzy and cooled when
rates jumped due to the Federal Reserve’s effort to quell
inflation.
U.S. home prices climbed 0.6% from a month earlier in February,
on par with the 0.6% average monthly gain in the roughly eight
years leading up to the pandemic. Prices seesawed during the
pandemic, rising by as much as 2% month over month in January 2022
and falling by as much as 0.2% in August 2022.
The story is similar when looking at year-over-year changes.
U.S. home prices climbed 6.7% from a year earlier in February,
similar to the 6.9% average annual gain in the years leading up to
the pandemic. By comparison, prices rose by as much as 22.9% year
over year in March 2022 and by as little as 3.4% in June 2023.
This is according to the February Redfin Home Price Index
(RHPI), covering the three months ending Feb. 29, 2024. Read the
full RHPI methodology here.
"Home prices have plateaued here in Portland. They shot up at
one point, then came back down to earth, and now they’re somewhere
in the middle,” said Meme Loggins, a Redfin Premier real estate
agent in Portland, OR. “There’s a mismatch between the attitudes of
buyers and sellers. I have a lot of buyers coming in expecting a
huge discount. Meanwhile, I have sellers who are standing firm on
how much their house is worth after seeing their friends’ homes
sell for way over the asking price during the pandemic. In reality,
it’s neither a buyer’s or seller’s market."
Mortgage rates remain elevated, but they’re not nearly as
volatile as they were before, which has helped stabilize home price
growth. And while elevated mortgage rates have taken a bite out of
homebuyer demand, that’s not translating into lower home prices
today because there still aren’t enough homes for sale—even as new
listings rebound. New listings rose to the highest level in nearly
a year and a half last month as the mortgage rate lock-in effect
eased, but housing supply was still far below pre-pandemic
levels.
“Inventory has picked up dramatically in the past two weeks, but
it’s getting snatched up quickly,” Loggins said. “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.”
Still, competition is nowhere near as fierce as it was during
the pandemic, and Redfin agents say that the most important thing
sellers can do is avoid overpricing their homes.
Prices Fell in Six Metros, Compared with 13 Metros in
January
Home prices fell from a month earlier in six of the 50 most
populous U.S. metropolitan areas, many of which were pandemic
boomtowns that have since seen their housing markets cool: Tampa,
FL (-0.5%), San Antonio (-0.4%), Charlotte, NC (-0.1%), Portland,
OR (-0.1%), Fort Worth, TX (-0.1%) and Houston (-0.1%). By
comparison, prices fell in 13 metros in January. Prices are likely
soft in Texas and Florida in part because those two states have
been building a lot of homes, which means supply has increased
(rising supply often puts downward pressure on prices). In Florida,
condo listings in particular are contributing to the jump in supply
amid a surge in HOA and insurance fees.
In Nassau County, NY, home prices rose 2% from a month earlier
in February—the biggest increase among the top 50 metros. Next came
Montgomery County, PA (2%), Warren, MI (1.9%), Chicago (1.8%) and
Indianapolis (1.6%).
To view the full report, including charts and metro-level data,
please visit:
https://www.redfin.com/news/redfin-home-price-index-february-2024
About Redfin Redfin (www.redfin.com) is a
technology-powered real estate company. We help people find a place
to live with brokerage, rentals, lending, title insurance, and
renovations services. We run the country's #1 real estate brokerage
site. Our customers can save thousands in fees while working with a
top agent. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can have our renovations crew fix it up to
sell for top dollar. Our rentals business empowers millions
nationwide to find apartments and houses for rent. Since launching
in 2006, we've saved customers more than $1.6 billion in
commissions. We serve more than 100 markets across the U.S. and
Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240319174317/en/
Redfin Journalist Services: Angela Cherry, 913-638-8249
press@redfin.com
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