The rate of home price growth slowed for the third straight month in March, giving people looking to buy a house more reason to enter the market.
Prices for single-family homes and condos rose 2.2% in March across the U.S. from where they stood one year earlier, according to new Homes.com data released Friday. The median home price increased $8,000 to $380,000. Though prices have gone up for 21 months in a row, the rate of growth has continued to slow since it peaked at 5.6% in December.
The data from Homes.com indicates that the number of properties for sale also increased in March. People shopping for a house have more options, which could put even more downward pressure on prices.
“The housing market is showing signs of a shift, with slowing price growth and increased inventory suggesting a move towards a more balanced market,” said Melina Duggal, senior director of market analytics at CoStar Group and Homes.com. “The overall trend points to more opportunities for buyers.”
Lower mortgage rates are also more motivation for prospective home buyers to get off the sidelines. The average rate for a 30-year fixed-rate mortgage maintained a gradual downward trend this week. Mortgage giant Freddie Mac reported Thursday that the rate dropped to 6.62%, staying under 7% for the 12th straight week.
Cleveland housing market leads the way
As in the prior month, the March data shows home prices in the Northeast and Midwest surging, with Cleveland leading the pack with 10.3% price growth year over year in March. Austin,Texas, was the only city in the South among the top 10 in terms of price growth, while four were in the Northeast and four in the Midwest.
“I would say we’ve remained a great place for investment; we’re still moderately priced compared to other major cities,” Angela Foster, an agent with Classic Realty Group Inc. in the Cleveland suburbs, said in an interview. “Starting in 2022, we’ve seen about an 8% increase in values for homes each year, even without doing any work on a house.”
Markets in the South are moving at a considerably slower pace. Five cities in the region were in the bottom 10 among those ranked by Homes.com. A few, including Orlando, Jacksonville and Tampa in Florida, saw prices decline. Tampa also lost ground in February’s data. San Francisco was the only Western city to see a drop in prices.
One West Coast city made the Top 10 for price growth: Los Angeles, which saw a 5.8% change year over year.