Investing.com -- The growth of U.S. home prices has slowed to its lowest pace since December 2022, according to a report by technology-powered real estate brokerage, Redfin (NASDAQ:RDFN). In March, home prices increased by only 0.2% from the previous month on a seasonally adjusted basis. This is a significant slowdown compared to the typical monthly gains of between 0.4% and 0.6% that have been observed since mid-2022.
On a yearly basis, home prices were up by 4.6%, a decrease from the 5.1% growth observed in February. This marks the 11th consecutive month that annual growth has slowed, and it’s the first time it has dipped below 5% since August 2023.
The Redfin Home Price Index (RHPI), which uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes, only recorded month-over-month price declines twice, both times in mid-2022, when a surge in mortgage rates significantly cooled the market.
The current slowdown in price growth is attributed to a lack of homebuying demand, which is not keeping pace with the increasing number of homes for sale. While some areas, particularly in the Midwest, are maintaining demand levels, generally, buyers are becoming more hesitant.
Redfin’s Senior Economist, Sheharyar Bokhari, stated that homes are taking longer to sell and prices are falling in some areas due to fear of a broader economic slowdown pushing many potential buyers to the sidelines. He added that new tariffs are increasing economic uncertainty, and prices may slow further in the coming months. However, he noted that with housing costs at near-record highs, this could be a silver lining for buyers needing to move immediately, as there will be more room for negotiation.
In March, home prices fell in 20 of the 50 most populous U.S. metro areas on a seasonally adjusted basis, month over month. The most significant decline was in Columbus (WA:CLC), OH, where prices fell by 0.7%, followed by Denver and San Jose, CA, both experiencing a 0.6% decrease. In contrast, the most substantial price increases were seen in San Francisco, with a 2.7% rise, Nassau County, NY, with a 2.6% increase, and Milwaukee, where prices rose by 1.7%.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.