Home price growth is finally back to where it was before the pandemic following 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 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. It’s similar to the S&P CoreLogic Case-Shiller Home Price Indices but publishes more than one month earlier. February data covers 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.
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%).
The table below includes the 50 most populous U.S. metro areas.
