U.S. home prices increased 2.8 percent year-over-year to a median of $307,600 in April, according to a report by Redfin.
Redfin said April’s increase is a more sustainable level of price growth than the 7 percent to 9 percent home price increases seen early last year.
“Homebuyers should take April’s home-price rebound as a cue that the cooldown may be coming to an end,” Redfin Chief Economist Daryl Fairweather said in a release. “The good news is that even though home prices are rising again, mortgage rates remain below last year’s levels and are unlikely to tick back up in a meaningful way this year.
“While buyers no longer need to feel as much urgency about locking in a low rate before they go back up, buyers who wait too long may face more competition and see home prices rise as a result,” Fairweather said.
Only five of the 85 metropolitan areas Redfin tracks had year-over-year decline in their median sale price in April. The report identified those markets as San Jose, Calif. (5 percent); New Haven, Conn. (1.8 percent); Seattle (1.3 percent); San Francisco (0.1 percent); and Portland, Ore. (0.1 percent).
Redfin said the metropolitan areas with the greatest year-over-year increases in sale prices in April were Columbus, Ohio (22.9 percent); Greenville, S.C. (14.5 percent); New Orleans (12.1 percent); McAllen, Texas (11.5 percent); and Cincinnati (10.1) percent.
“When mortgage rates go down, as they began to do in late November, it takes a few months for buyers to react,” Fairweather said. “Expensive metros like Seattle and Los Angeles have been the most sensitive to changes in rates because you have to borrow more to afford a home in those markets. Home sales are still down year-over-year in these places, but by less than last month, thanks to mortgage rates remaining low.”