US Home Prices Rising at Slowest Rate Since 2022
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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While home prices are still rising across the country, adding to the struggles faced by aspiring homeowners bogged down by high mortgage rates and growing uncertainty, they are now doing so at the slowest pace in years, according to the latest data.
Home prices inched up 0.2 percent in March from February, real estate brokerage Redfin found, the slowest pace since December 2022.
Why It Matters
The U.S. is in the midst of a housing affordability crisis driven by rising home prices, historically high mortgage rates, and a chronic lack of inventory. With the median sale price of a home in the U.S. ($431,057) now 70 percent higher than it was in March 2020 ($302,462) and mortgage rates still hovering close to the 7 percent mark, many aspiring homebuyers have been squeezed to the sidelines.
A slowdown in home price growth, which is being accompanied by rising inventory across the country could finally offer some relief and more negotiating power to buyers. But growing economic uncertainty over the impact of President Donald Trump's tariffs could undermine their gains.
What To Know
While home prices were still up 4.6 percent in March compared to a year earlier, the pace at which they rose slowed down from 5.1 percent the month before, marking the 11th consecutive month of slowing annual growth.
The main reason behind this slowdown is that demand is not keeping up with growing inventory across the country. Despite the fact that more supply is desperately needed to fix the current gap existing in the U.S. housing market, many Americans just cannot afford to buy a home at the moment.
Zillow Home Loans mortgage signage is displayed in downtown Phoenix, Arizona, on June 5, 2024.
Zillow Home Loans mortgage signage is displayed in downtown Phoenix, Arizona, on June 5, 2024.
PATRICK T. FALLON/AFP via Getty Images
While demand is holding up in the Midwest, according to Redfin, in other parts of the country buyers "are backing off." In Florida and Texas, the two states that have built more new homes than any other over the past couple of years, unsold homes are piling up on the market as potential buyers are discouraged by rising homeowners association (HOA) fees and property insurance premiums.
In many of these two state's former pandemic boomtowns, prices have now begun to fall. The same is happening across the country, with Redfin reporting that 20 of the 50 most populous U.S. metros recorded a drop in home prices between February and March.
Columbus, Ohio, reported the biggest decline (-0.7 percent), followed by Denver, Colorado (-0.6 percent), and San Jose, California (-0.6 percent). Prices increased the most month-over-month in San Francisco (2.7 percent), Nassau County, New York (2.6 percent), and Milwaukee, Wisconsin (1.7 percent).
What People Are Saying
Sheharyar Bokhari, Redfin senior economist, said in a statement accompanying the report: "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.
"New tariffs are adding to the economic uncertainty and prices may slow even further in coming months. 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."
What Happens Next
A majority of experts expect price growth to continue this year, but at a slower pace than it had in the past.
The Mortgage Bankers Association foresees price growth to slow to 1.3 percent year-over-year by the end of 2025 and hold steady at that rate in 2026. The National Association of Realtors (NAR) expects home prices to grow 3 percent throughout 2025 and 4 percent next year.
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