U.S. home prices drop for third consecutive month in July

Investing.com -- U.S. home prices declined 0.1% in July on a seasonally adjusted basis, marking the third straight month of price drops, according to a new report from real estate brokerage Redfin (NASDAQ:RDFN).

Year-over-year price growth slowed to 2.9%, the lowest rate recorded since Redfin began tracking this data in 2012 through its Redfin Home Price Index (RHPI).

The RHPI, which uses repeat-sales pricing methodology to calculate seasonally adjusted price changes for single-family homes, has only recorded monthly declines five times since 2012: August 2022, December 2022, and now May, June, and July of this year.

The cooling price trend comes as housing inventory has returned to pre-pandemic levels while buyer activity has fallen to the lowest point in more than a decade, excluding April 2020 during peak pandemic lockdowns. Potential homebuyers remain hesitant due to near-record high prices, elevated mortgage rates, and economic uncertainty.

"After several years of tight inventory driving relentless price growth, we’re now seeing the opposite dynamic," said Redfin Senior Economist Sheharyar Bokhari. "Home prices are falling in more U.S. metros than at any point since we began tracking this data in 2012, and the reason is simple: supply is significantly outpacing demand."

At the metro level, prices fell in 39 of the 50 most populous U.S. metropolitan areas in July on a seasonally adjusted monthly basis - the highest number since Redfin began tracking this data. This surpassed the previous record of 38 metros with declining prices set in September 2022.

West Palm Beach, Florida saw the steepest monthly decline at 2.6%, followed by San Diego (-2.2%) and Austin, Texas (-1.9%). Conversely, Warren, Michigan led price increases at 1.3%, with Newark, New Jersey (0.7%) and San Jose, California (0.5%) also showing gains.

On an annual basis, New York posted the strongest price growth at 11.8%, followed by Newark (9.3%) and Nassau County, New York (8.3%). The largest yearly price drops occurred in Austin (-4.5%), Tampa, Florida (-4.2%), and Dallas (-2.6%).

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