U.S. home prices rose just 0.6 percent year over year in February, the smallest gain since March 2012.
According to Redfin, the slowdown was driven by price drops in previously hot markets, such as San Francisco and San Jose, which saw year over year price drops of 11.3 and 7.9, respectively. The median home price across the metros that Redfin tracks is now $287,400.
“When home prices are going up quickly, buyers feel like they are forced to move fast and purchase a home before prices rise even more. Now that home prices are growing slower than inflation (prices for consumer goods were up 1.5% annually in February), there really isn’t much downside to taking your time,” says Redfin chief economist Daryl Fairweather. “And now that mortgage rates are no longer going up every week, buyers in many markets have the luxury of knowing that whether they buy now or later they will pay about the same for a home.”’