Home prices have stopped falling in America’s largest metro areas for the first time in two years, according to Redfin.
Home prices rose or remained stable in 50 of the most populous U.S. metropolitan areas in April, the real estate listings site said in a report this week. This is the first time this has happened in all 50 cities since July 2022, when mortgage rates and home prices climbed in tandem as buyers rushed to enter the market.
The biggest increase occurred in Anaheim, California, where prices jumped 20% year over year in April. Prices rose 15% in Detroit and 14% in San Jose, Calif., the company added.
High borrowing costs and scarce inventory have continued to keep housing prices high. The 30-year fixed mortgage rate just increased for a fifth straight week, reaching 7.22% on Friday, according to Freddie Mac data. However, demand remained quite strong. Redfin’s Home Buyer Demand Index, a gauge of tourism activity and other services using Redfin agents, rose 3% last month, the company said.
The offer, for its part, has not improved much. Even though new listings jumped 15% from last year’s levels, inventory remains “well below” typical levels in April, Redfin noted.
The four-week moving average median sales price for a home was $383,188, Redfin estimated, within $100 of its all-time high.
Real estate experts warn that housing costs could remain high for the foreseeable future as interest rates don’t appear likely to drop anytime soon. The Fed said it needs more confidence that inflation will return to its 2% price target before considering rate cuts – meaning borrowing costs in the economy will likely remain high for the time being.
“While housing costs are not expected to rise much further, they will remain high for the foreseeable future, which could deter more buyers,” Chen Zhao, head of economic research at Redfin, said in a statement. “But for serious house hunters who can afford today’s mortgage rates and find a home they like, getting in on it now isn’t a bad idea, given that inventory is low and costs aren’t won’t go down any time soon.”
businessinsider
