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Residence Worth Progress Is Again to Pre-Covid Ranges

After three years of drastic price fluctuations—with values surging and then cooling down—home price growth in the U.S. is back to where it was before the pandemic, according to a report by Redfin on Tuesday. 

During the Covid pandemic, home prices increased as low mortgage rates created home-buying madness, leading the Federal Reserve to increase rates in an attempt to cool down inflation. That in turn led to a swiftly cooling real estate market, as would-be buyers eschewed those higher rates. 

Home prices increased 0.6% in February from the prior month, which was the average monthly gain recorded in the eight years before the pandemic. During the height of the pandemic, prices rose as much as 2% month over month in January 2022 and fell by as much as 0.2% in August 2022.

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“There’s a mismatch between the attitudes of buyers and sellers,” said Meme Loggins, a Redfin agent in Portland, Oregon, where prices fell 0.1% in February. “I have a lot of buyers coming in expecting a huge discount. Meanwhile, I have sellers who are standing firm on how much their house is worth after seeing their friends’ homes sell for way over the asking price during the pandemic. In reality, it’s neither a buyer’s or seller’s market.”

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When looking at year-over-year changes annually, home prices increased by 6.7%, comparable to the 6.9% average annual gain in the years before the pandemic hit. 

Additionally, though listings have rebounded to their highest level in 18 months, there are still not enough homes on the market to meet demand. 

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“Inventory has picked up dramatically in the past two weeks, but it’s getting snatched up quickly,” Loggins said. In Nassau County, New York, home prices rose 2% on a monthly basis in February, the biggest increase among the 50 metropolitan areas analyzed in the report. Montgomery County, Pennsylvania (2%); Warren, Michigan (1.9%); Chicago (1.8%) and Indianapolis (1.6%) rounded out the top five for monthly price increases. 

The biggest month-to-month price drops were in Tampa, Florida, where they fell 0.5%, and San Antonio, Texas, which recorded a 0.4% decline.

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