US home prices rose at the fastest annual pace in a year in July, driven by high-end demand in an otherwise sluggish housing market, Redfin said Tuesday.
Its home price index increased 3.4% year over year last month, according to the online real estate brokerage. Prices grew 0.3% sequentially, flat compared with June levels.
While "everyday buyers" are constrained by affordability challenges, the wealthy continue to compete for luxury homes, Redfin Head of Economics Research Chen Zhao said.
"That upper-end strength is helping prop up prices even as the broader market cools, giving buyers some bargaining power," Zhao said.
Prices rose the most in San Francisco on an annual basis, at a 13% rate, followed by Chicago. The biggest year-over-year decline was in Texas.
The stable month-over-month price change suggests buyers continue to face high housing costs, including elevated mortgage rates, Redfin said. Additionally, sellers significantly outnumber buyers in the market, another factor capping price growth.
Last week, the brokerage said the number of US homebuyers hit a record low in July, pushing the housing market further in buyers' favor amid ongoing macro uncertainty.
The median sales price of existing homes increased 2% on a yearly basis to $434,100 last month, the National Association of Realtors reported Aug. 11.
"Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations," NAR Chief Economist Lawrence Yun said Aug. 18.
