U.S. home-sale prices increased just 0.6 percent in February compared to a year ago, to a median of $287,400 across the metros Redfin tracks. This is the smallest year-over-year price increase recorded since prices stopped falling year-over-year in March 2012.
“When home prices are going up quickly, buyers feel like they are forced to move fast and purchase a home before prices rise even more. Now that home prices are growing slower than inflation (prices for consumer goods were up 1.5% annually in February), there really isn’t much downside to taking your time,” said Redfin chief economist Daryl Fairweather. “And now that mortgage rates are no longer going up every week, buyers in many markets have the luxury of knowing that whether they buy now or later they will pay about the same for a home.”
Home prices fell year over year in just 10 of the 85 largest metro areas Redfin tracks:
Completed home sales rose nationally for the first time in seven months and only the third time in the past 12 months in February, up 1.9 percent from a year earlier. Growth in home sales has see-sawed above and below zero, but the overall trend has been falling since late 2016. February may be the start of a reversal in this trend. Home sales fell in 41 of the 85 largest metro areas that Redfin tracks.
The number of homes for sale at the end of the month was up 2.9 percent from a year earlier in February. The number of homes newly listed for sale fell from February 2018 (-4.8%).
Of the 85 largest metro areas Redfin tracks, 49 saw an increase in the number of homes for sale compared to a year earlier, with the largest gains coming in Seattle (+101.2%) and San Jose (+82.1%). Months of supply (inventory divided by monthly sales) is still very low in both these markets—1.9 in Seattle and 2.5 in San Jose, giving sellers a clear upper hand. A market that is balanced between buyers and sellers typically has between four and six months of supply.
The metro areas with the biggest declines in homes for sale were New Orleans (-35.0%) and St. Louis (-23.8%).
Home-selling speeds, which reached a record-fast median pace of 35 days on market last May, slowed year-over-year again in February. The typical home that sold in February went under contract in a median of 59 days, two days longer than a year earlier.
“Because homes are sitting on the market longer and the market is less competitive than last year, first-time homebuyers now have a better chance of winning a home,” said Fairweather. “That could mean more potential buyers in the spring. Home sales are already rebounding this month, and that trend may continue now that the market is more balanced.”
In February, 17.8 percent of homes sold above the list price, down from 21.5 percent in February 2018, but up slightly from January. Meanwhile 20.5 percent of homes on the market in February had a price drop, up from February 2018’s share of 18.1 percent. The share of homes that went under contract within two weeks inched up to 15.4 percent in February, up just barely from the February 2018 level of 15.3 percent.
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Redfin Estimate
New this month: You can now generate a downloadable/printable summary of your local housing market stats in the Redfin Data Center. Here’s the national view:
Below are market-by-market breakdowns for prices, inventory, new listings and sales for markets with populations of 750 thousand or more. For downloadable data on all of the markets Redfin tracks, visit the Redfin Data Center.
