U.S. home prices rose 0.2% in August, rebounding slightly after stalling in July.
Annual price growth slowed to 3.1%, the weakest pace since at least 2012.
Market dynamics are shifting, with both buyers and sellers finding new leverage.
Homebuyers can’t seem to catch a break. Just as mortgage rates go down, home prices continue to rise. The latest Redfin Home Price Index shows home prices inched higher in August, rising 0.2% from July on a seasonally adjusted basis.
That modest increase marked the first acceleration in monthly price growth since January, suggesting prices aren’t cooling everywhere. Buyers, however, can take some consolation that the year-over-year increase was the slowest since 2012.
The slowdown comes as housing inventory returns to pre-pandemic levels, removing the scarcity that fueled bidding wars in recent years. At the same time, affordability challenges continue to keep many buyers on the sidelines.
Mortgage rates remain elevated, and home values are still near record highs, creating a double burden for would-be purchasers.
Sellers are also showing new caution. The number of homeowners listing their properties declined in July for the first time in two years, suggesting that many are choosing to wait out the uncertainty.
“The tug-of-war in today’s housing market may actually be creating an opening for both buyers and sellers,” said Redfin Senior Economist Sheharyar Bokhari. “With more inventory available, intense bidding wars are in the rearview mirror, so buyers have room to negotiate. At the same time, sellers who price their homes realistically are still finding buyers, and overall, prices are holding steady.”
Regional winners and losers
Price trends diverged sharply across U.S. metro areas in August:
Biggest monthly declines: San Diego (-1.4%), Los Angeles (-1.1%), and Fort Lauderdale (-1%).
Biggest monthly gains: San Francisco (+1.5%), Philadelphia (+1.5%), and Charlotte (+0.8%).
On an annual basis, the New York metro area led the pack, with prices up 11%. Nassau County, N.Y. (+8.9%) and Newark, N.J. (+8.6%) followed closely. Meanwhile, the steepest annual declines were in Austin, Texas (-3.7%), Tampa, Fla. (-3.5%), and Oakland, Calif. (-2.1%).
While national home price growth is slowing, economists note that the market’s current balance may create opportunities. Buyers face less competition than in previous years, and sellers who adjust their expectations to match market realities are still able to close deals.
With demand muted and supply no longer constrained, the second half of 2025 could mark a period of relative stability — one that leaves room for both sides to navigate more favorable terms.