Redfin Home Price Index

Prices Rose 0.6% in February, Marking Return to Pre-Pandemic Norm

(NASDAQ: RDFN) — Home price growth is finally back to where it was before the pandemic, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This follows a three-year rollercoaster ride in which prices soared when ultra-low mortgage rates fueled a homebuying frenzy and cooled when rates jumped due to the Federal Reserve’s effort to quell inflation.

U.S. home prices climbed 0.6% from a month earlier in February, on par with the 0.6% average monthly gain in the roughly eight years leading up to the pandemic. Prices seesawed during the pandemic, rising by as much as 2% month over month in January 2022 and falling by as much as 0.2% in August 2022.

The story is similar when looking at year-over-year changes. U.S. home prices climbed 6.7% from a year earlier in February, similar to the 6.9% average annual gain in the years leading up to the pandemic. By comparison, prices rose by as much as 22.9% year over year in March 2022 and by as little as 3.4% in June 2023.

This is according to the February Redfin Home Price Index (RHPI), covering the three months ending Feb. 29, 2024. Read the full RHPI methodology here.

"Home prices have plateaued here in Portland. They shot up at one point, then came back down to earth, and now they’re somewhere in the middle,” said Meme Loggins, a Redfin Premier real estate agent in Portland, OR. “There’s a mismatch between the attitudes of buyers and sellers. I have a lot of buyers coming in expecting a huge discount. Meanwhile, I have sellers who are standing firm on how much their house is worth after seeing their friends’ homes sell for way over the asking price during the pandemic. In reality, it’s neither a buyer’s or seller’s market."

Mortgage rates remain elevated, but they’re not nearly as volatile as they were before, which has helped stabilize home price growth. And while elevated mortgage rates have taken a bite out of homebuyer demand, that’s not translating into lower home prices today because there still aren’t enough homes for sale—even as new listings rebound. New listings rose to the highest level in nearly a year and a half last month as the mortgage rate lock-in effect eased, but housing supply was still far below pre-pandemic levels.