Home prices rose 3.7% in a year, the fastest pace in 12 months, in the strongest buyer's market on record

U.S. home prices rose 0.25% in August from July on a seasonally adjusted basis and 3.7% from a year earlier, the fastest annual gain in a year, according to the Redfin Home Price Index released Tuesday. The monthly pace eased slightly, from 0.26% in July and 0.27% in June.

That runs against the other headline in housing right now. Redfin says August was the strongest buyer's market on record, with 58% more sellers than buyers nationally and more than twice as many in parts of the Sun Belt.

Why prices are still rising in a buyer's market

The obvious read of "buyer's market" is that prices are falling. Nationally, they are not. Redfin gives two reasons: many owners have enough equity that they would rather wait than take a steep discount, which sets a floor, and strong luxury demand in places like Florida and San Francisco is lifting the average.

The index measures repeat sales of single-family homes, similar to Case-Shiller but published about a month sooner, and August covers the three months ending August 31. Buyer leverage is showing up mostly in terms rather than price: Redfin reported last week that nearly half of buyers got concessions from sellers.

The split by city is wide:

Four of the five major metros where prices are down from a year ago are in Texas, and Redfin says those are among the markets with more than twice as many sellers as buyers. Month over month, St. Louis led with 1.1%, while Austin and Charlotte fell the most, both down 0.7%.

What it costs a buyer now versus a year ago

Price is only half of it. Freddie Mac's weekly survey put the average 30-year fixed rate at 6.95% for the week of September 17, against 6.26% in the week of September 18, 2025. We worked a simple example, principal and interest only, with 20% down:

That is about $224 a month more, an 11% increase, for a home that gained 3.7%. Roughly two-thirds of the jump comes from the rate: at last year's rate the bigger loan would cost only about $73 more a month. Taxes and insurance are not included.

For a buyer closing this fall, the practical point is that the leverage Redfin describes is real but shows up in negotiation, not in lower list prices outside Texas and a few other soft markets. Seller-paid closing costs or a rate buydown can be worth more than a small price cut when rates are this high. Where rates go next depends heavily on the 10-year Treasury yield, which you can follow on our 10-year chart. For the latest rate move, see our Freddie Mac story.

Sources: Redfin Home Price Index, Redfin on concessions, Freddie Mac PMMS. Payment figures are Chronicle calculations. This is market information, not financial advice.