Home prices in the U.S. reached a record high over the summer, but the trend of rapid price hikes appears to be slowing. "Home price growth stalled in the third quarter , after a steady start to 2024," Brian D. Luke of S&P Dow Jones Indices explained in a statement.
After years of hefty increases, costs nationally rose just 3.9 percent from a year prior in September 2024. By comparison, that's a decrease from August's 4.2 percent, according to new data published by S&P CoreLogic Case-Shiller. The index also took into account housing prices in the country's biggest cities and found that rates increased 5.2 percent in August but only 4.6 percent in September, an early indication that a market shift may be on the horizon.
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Of the 20 bustling metro areas analyzed in the report, New York, Cleveland, and Chicago recorded the biggest gains in September with substantial upticks of 7.5 percent, 7.1 percent, and 6.9 percent, respectively. Interestingly, the three cities also had the fewest number of active listings compared to the same time last year, per Realtor.com . In terms of where in the nation prices are slowing the most, that would be Tampa, Florida, and Portland, Oregon. That may have to do with the number of listings in the Mile High City and The Big Guava being up 62 percent and 72 percent over a year prior.
"Sales prices of existing homes falling is a bit of good news for buyers, and while 2024 will go down as one of the worst years for sales, maybe we're finally seeing a sustained deceleration in price increases," Robert Frick, corporate economist with Navy Federal Credit Union, told Bankrate . "With mortgage rates up recently, the price drop will be lost in overall housing affordability. But together with lower mortgage rates next year, as many are forecasting, a slowdown in price increases could mean markedly improving conditions for buyers in 2025."
A big factor in why prices have been so high is an overall lack of supply. However, inventory levels have recently experienced an uptick , clocking the first annual gain in over three years, which is anticipated to lead to more sales. And, according to the National Association of Realtors prediction for next year, the median sale price of a previously owned home in 2025 is expected to grow at just 1.8 percent to $410,700, half the 3.6 percent gain expected this year.
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