Redfin Real Estate, based in the United States, revealed in a recent report that U.S. real estate prices rose by 0.6% compared to the previous month of February.
According to the company, this is in line with the average monthly gains of 0.6% over the eight years preceding the COVID-19 pandemic, as reported by the U.S. network CNBC.
For her part, Darrell Fairweather, chief economist at Redfin, said that before the pandemic, it was normal for prices to grow by about half a percent each month, or increase by about 5% or 6% annually. She added, “We’ve returned to this trend, despite rising mortgage rates.”
Meanwhile, Matthew Walsh, associate director and economist at Moody’s Analytics, said a similar trend was evident in Moody’s Analytics” home price index. He emphasized, ”Home prices are rising at the same pace as before. We’ve returned to the trend we saw before the pandemic.“
Nevertheless, experts say that today’s market is significantly different from what it was two to eight years ago, as the average home remains unaffordable for most prospective buyers, while inventory has improved slightly but not enough to meet demand.
Ferroither also said, ”The sentiment we’re getting from our agents is that neither sellers nor buyers are satisfied with this market.“
She added: ”Sellers are dissatisfied with the offers they’re receiving, and buyers are disappointed by high prices and high mortgage rates.“
Fairweather noted that although the U.S. housing market in terms of price growth, the main difference between today’s market and the pre-pandemic period is the relatively low number of transactions, which is largely due to high mortgage rates.
In the same vein, data from the Federal National Mortgage Association, Freddie Mac, showed that mortgage rates peaked at nearly 8% last year but remain above 6%.
Walsh said that transaction levels are actually at "recession lows, despite the rise in February’s data.“
He added that another factor affecting sales is the extremely limited supply of homes.
Redfin reported that new listings rose by 5% over the past four weeks, ending March 17, marking the largest year-over-year jump since May 2023.
”But it’s more like a modest recovery from rock bottom,“ Fairweather clarified, adding, ”We’re not back to where we were before the pandemic.“
While economists view the growth in supply as largely tied to seasonal trends, Walsh said that homeowners often list their homes for sale in February because they prefer to move during the spring and summer.
”There’s another factor,“ said Fairweather, ”which is that people need to move either to take a new job, get married, or because of some other major life event."
