H
ome prices have been steadily increasing over the past year, with a 0.5% month-over-month rise in October, according to Redfin's Home Price Index. This moderate growth is consistent with patterns seen between 2015 and 2020, contrasting with the pandemic-era fluctuations that saw monthly increases peak at 2% in June 2021 and drop into negatives in August 2022.

    The year-over-year increase of 5.9% is the smallest annual gain since December, driven by two key factors: elevated mortgage rates and a shortage of available homes. While high interest rates may have discouraged some buyers, the limited inventory created competitive conditions that pushed prices up.

    Redfin's senior economist Sheharyar Bokhari notes that homebuyer demand could increase after the presidential election, potentially leading to heightened competition and price increases, depending on new listings. Only eight of the 50 most populous metropolitan areas saw price declines in October, with San Antonio experiencing a 2.9% drop.

    Conversely, San Francisco led the pack with a 2.3% month-over-month gain, followed by Detroit (1.5%) and Nassau County, New York (1.2%). Home sales are expected to remain at their lowest level since 1995, attributed to high prices and elevated mortgage rates. The Redfin Home Price Index uses repeat-sales pricing to track single-family home values, analyzing properties sold multiple times.