Home prices rebounded in August, recording year-over-year increases after two months of annual declines, according to the Realtor.com August Monthly Housing Trends Report.
The median list price in August was $435,000, 0.7% higher than a year ago. Realtor.com projects that the median list price is unlikely to surpass the record peak of $449,000 from June 2022 for the duration of the calendar year.
Home price increases were accompanied by a second consecutive month of year-over-year decreases for the number of homes on the market. Active inventory remained 47.8% below typical 2017 to 2019 levels, though inventory did tick up 3.5% on a month-over-month basis.
“While the uptick in new listings is good news for home shoppers, inventory remains persistently low, even with record-high mortgage rates putting a damper on demand,” says Realtor.com chief economist Danielle Hale. “The inventory crunch continues to put upward pressure on home prices, amplifying affordability concerns and shutting some potential buyers out of the market. However, we anticipate mortgage rates will gradually ease through the end of the year and, despite this month’s bump in home prices, we’ll be unlikely to see a new price peak this year.”
Despite an increase in newly listed homes for sale in August, affordability will remain a chief concern in the housing market. Construction activity is not sufficiently robust enough to offset the inventory shortage and ease price points, according to Realtor.com. Additionally, elevated mortgage rates have raised the monthly financing cost of the average home by about 21.7% compared with August 2022.
According to Realtor.com, metros in the Northeast region had the highest rate of growth for active listing prices on a year-over-year basis, with an average increase of 9.7%. The share of homes with price reductions decreased to 16.2% from 19.3% a year ago. Among the 50 largest metros, only seven saw their median list price decline compared with August 2022. Raleigh, North Carolina (-4.6%) and Las Vegas (-2.8%) experienced the greatest year-over-year price declines, while San Antonio (+3.9%) and Memphis, Tennessee (+3.7%) experienced the largest price increases compared with August 2022.
Nationally, active inventory fell 7.9% year over year in August, and pending listings declined by 11.5% compared with August 2022. Newly listed homes were 7.5% below last year’s levels, but Realtor.com says this rate of decline is much improved from a decline of 20.8% in July. Inventory of homes actively for sale in all regions was down between 30% and 60% from pre-pandemic listings, and only Milwaukee (+6.8%) and Jacksonville, Florida (+4%) saw new listings increase compared with August 2022 levels.