Are increases in home prices slowing down?
U.S. home prices went up again in March, but by just 0.2% from a month earlier as a new analysis shows the pace of the increase is the slowest since December 2022.
The 4.6% year-over-year growth, down from 5.1% in February, was posted Tuesday by Seattle-based Redfin, the nation's largest brokerage website. It marks the 11th consecutive month that annual growth in home prices has slowed.
Redfin's Home Price Index for March, a seasonally adjusted calculation of the changes in prices of single-family homes in the country's 50 largest metropolitan areas, also fell below 5% for the first time since August 2023.
The dip is due to demand not keeping up with the supply of homes for sale, according to Redfin, as financial markets react to President Donald Trump's on-again, off-again tariffs and escalating pressure on the Federal Reserve chairman.
'Homes are taking longer to sell and prices are falling in some areas because fear of a broader economic slowdown is pushing many would-be buyers to the sidelines,' Redfin senior economist Sheharyar Bokhari said.
'New tariffs are adding to the economic uncertainty and prices may slow even further in coming months,' Bokhari said. 'With housing costs at near-record highs, that's a silver lining for a buyer who has to move right now, as there will be more room for negotiation.'
Last week, Redfin released poll results showing a majority of Americans say the president's tariff policies have made them less likely to buy a home or other big-ticket item this year. Nearly a quarter of the poll respondents said they'd canceled plans to make a major purchase.
Mortgage rates briefly shot up to more than 7% amid the financial turbulence but the U.S. weekly average for a 30-year fixed-rate mortgage reported on Thursdays by the Federal Home Loan Mortgage Corp., better known as Freddie Mac, has stayed below that threshold.
The Redfin Home Price Index has seen a month-over-month drop just twice, both times when mortgage rates skyrocketed in mid-2022. Since then, the index has shown prices growing 'relatively steadily,' with most months posting increases of between 0.4% and 0.6%.
In March, home prices went down in 20 of the 50 largest metro areas, with the largest drop in Columbus, Ohio (-0.7%), followed by Denver (-0.6%), and San Jose, California (-0.6%). Prices jumped the most in San Francisco (2.7%), Nassau County, New York (2.6%) and Milwaukee (1.7%).
No metro area in Utah was included in the analysis.
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