The pace of US home price growth decelerated sequentially in the quarter through August as buyers gained more bargaining power than before, while the annual rate of price increases was the fastest in a year, Redfin said Tuesday.
Prices rose 0.25% sequentially in the three-month period ended Aug. 31 on a seasonally adjusted basis, down from growth rates of 0.26% and 0.27% in the preceding two linking periods, respectively.
On an annual basis, prices increased 3.7% in the quarter through August, marking the fastest year-over-year growth rate in a year, according to the online real estate brokerage.
Buyers got more bargaining power than they already had, with August marking the strongest buyer's market on record, as there were 58% more sellers than buyers, Redfin said. There were more than 100% more sellers than buyers in many parts of the US Sun Belt. Elevated housing costs and macro uncertainty, as well as a rising inventory of for-sale homes, means demand continues to be "sluggish," the report showed.
"Slowing price growth is good news for buyers because it means waiting for the right home is less likely to come with a rapidly rising price tag," Redfin Head of Economics Chen Zhao said. "Buyers can afford to be choosy and negotiate."
Still, home prices remain supported as homeowners with substantial equity remain reluctant to accept steep discounts. "The hot luxury segment, driven in part by affluent buyers in Florida and San Francisco's (artificial intelligence)-fueled housing market, is another factor keeping prices afloat," Redfin said.
Home prices increased in almost half of the 50 most populous US metros sequentially during the three-month period, led by St. Louis, Missouri, where prices rose 1.1%. Austin, Texas; and Charlotte, North Carolina, saw prices drop 0.7% each, the biggest decreases, the report showed.
Annually, San Francisco posted the biggest price gain, up 12%. Prices fell year over year in five major metros, led by Dallas with a 1.4% decline, according to Redfin.
"Sellers should recognize that pricing too high in today's market could mean their home sits on the market -- and they may eventually have to cut the price," Zhao said. "Pricing realistically from the start is a good way to attract attention."
Last week, Redfin said the share of US home sales in the quarter through August in which sellers gave concessions to buyers reached the highest for that period since at least 2020.
