Redfin Home Price Index sees smallest increase in 6 months

"prices aren’t falling because there’s still a shortage of homes for sale"

Price growth for US homes is slowing nationwide according to a new report out today by Redfin, dropping to a snails pace for growth of just .4% in December with a year over year growth rate of 6.6%.

The Redfin Home Price Index is similar to the S&P CoreLogic Case-Shiller Home Price Index but published a full month ahead and covers the three months ending December 31, 2023.

December sales reflected properties placed under agreement in October or November at or near the mortgage rate peak which may have depressed prices according to Redfin Senior Economist Sheharyar Bokhari.

“Homebuyers can take solace in the fact that prices are unlikely to balloon again like they did during the pandemic homebuying frenzy, but they probably won’t fall any time soon, either,” Bokhari said. “That’s because supply isn’t growing enough to bring prices down, and mortgage rates are no longer falling enough to drive prices up significantly.”

Redfin also pointed to a ever so slight increase in supply, up .01%, for the slower rate of price growth “Still, housing supply remained far below pre-pandemic levels, preventing home prices from dropping as buyers compete for a limited pool of homes.”

Prices dropped the most in Austin -1.1% and rose the most in Chicago +2.6% out of the 50 metros studied by Redfin.