U.S. home prices rose 1.4% from a year earlier in August and 0.2% from July, according to First American Data & Analytics.
Annual price growth has stayed below its pre-pandemic average of 3.4% for 17 straight months.
The national figure hides sharp differences: prices rose 5.5% in Chicago but fell 5.0% in Dallas.
The rapid rise in U.S. home prices has slowed, but that does not mean homes have become cheap. Prices were 1.4% higher in August than a year earlier, according to First American Data & Analytics’ latest Home Price Index. They also rose 0.2% from July.
Annual growth has remained below the company’s nearly three-decade, pre-pandemic average of 3.4% for 17 consecutive months. Even so, August prices were approximately 80% above their average for the same month during the five years before the pandemic, First American said. Slower growth offers prospective buyers some relief from rapid price increases, but it has not erased the earlier surge.
First American Chief Economist Mark Fleming attributed the subdued national pace to forces pulling in opposite directions. Higher mortgage rates are holding back buyers, while homeowners reluctant to give up lower-rate mortgages are limiting the supply of homes for sale.
The result, he said, is relatively steady but modest price growth.
Where prices are rising and falling
Conditions vary considerably by location. Among the 50 largest metropolitan markets covered by the index, Chicago posted the strongest annual gain in August at 5.5%. Hartford, Connecticut, followed at 5.3%, and New York at 5.2%.
Dallas recorded the largest decline, with prices down 5.0% from a year earlier. Prices also fell in Austin, Texas, by 3.4%; San Antonio by 2.9%; and Tampa, Florida, and Denver by 1.9% each. Fleming described the declines in several Sun Belt and Western markets as a rebalancing after years of rapid gains.
The picture also differs by price range. Prices for homes in the least expensive third of their local markets rose 5.5% in Cleveland and 5.3% in Philadelphia. Those gains matter particularly to first-time buyers looking for lower-priced homes, even as national price growth cools.
For buyers and sellers, the national average is only a starting point. A buyer in a market with falling prices may have more room to negotiate, while someone shopping in a city with strong gains could still face rising costs. First American’s latest index figures are preliminary and may change as more transactions are recorded.