According to data released by Black Knight, home prices in the United States continued to climb in August, reaching a record high for the fourth consecutive month. The prices increased by 0.68% compared to July, with nearly half of the nation's 50 largest markets seeing an increase of 0.75% or more. This growth is significant, as August's gain of +0.24% was more than 60% larger than the 25-year average for the month.
Intercontinental Exchange data also shows that nationally, home prices are now 2.5% above the 2022 peak on a seasonally adjusted basis. Andy Walden, the vice president of enterprise research at ICE, stated that year-over-year home price growth has been reaccelerating in recent months, pushing annual appreciation up to a stronger-than-expected +3.8%. This marks the third consecutive month of clear acceleration in home price growth at the national level.
However, there may be some relief for buyers in the fall. Zillow has noted signs of cooling in the housing market, with an increase of 9.2% in the percentage of home listings that had a price cut in the week leading up to September 16. This presents a rare opportunity for buyers this year, with more motivated sellers and more active listings overall.
Despite the competition among homebuyers, high mortgage rates have also deterred potential buyers. The average 30-year fixed mortgage rate reached 7.31%, the highest level in over two decades, according to Freddie Mac.
Zillow economists had previously predicted that home prices would continue to increase steadily through the first half of next year, regardless of the current signs of cooling in the market.
Overall, while home prices in the United States have reached record highs, there are indications of a cooling market, which could provide opportunities for buyers. However, high mortgage rates remain a challenge for potential homebuyers.