US Home Prices Rose 3.7% in August, the Fastest in a Year, in the Weakest Market for Sellers on Record

US home prices rose 3.7% over the year in August on the Redfin index, the fastest in a year, while sellers outnumbered buyers by 58% nationally.

United States home prices were 3.7% higher in August 2026 than a year earlier, the fastest annual growth rate in a year, according to the Redfin Home Price Index published on 22 September. The same release describes August as the strongest buyer's market on record, with 58% more home sellers than buyers across the country. Those two statements sit in the same paragraph of the same report, and both are correct.

Monthly growth is grinding down while the annual rate climbs

The index rose 0.25% in August on a seasonally adjusted basis, after 0.26% in July and 0.27% in June. Three consecutive months of slightly smaller increases is the opposite of an acceleration. The annual figure climbed anyway, because the months dropping out of the twelve-month comparison were weaker than the ones replacing them. This is the most common way a headline price number misleads: it reports what happened a year ago as much as what happened last month.

The map has two halves

The monthly gainers were second-tier and northern. St. Louis led at 1.1%, ahead of Pittsburgh at 1.0%, with San Antonio, San Jose and Baltimore all at 0.9%. The decliners were Sun Belt and mid-western: Austin and Charlotte both fell 0.7%, Milwaukee and Warren in Michigan both 0.6%, and Fort Lauderdale 0.5%. The annual spread is wider still. San Francisco was up 12.0%, West Palm Beach 10.4% and Chicago 9.2%, while Dallas fell 1.4%, Austin 1.0% and Fort Worth 0.7%. Redfin notes that in the Sun Belt sellers outnumber buyers by more than 100%, which is where the national average of 58% is coming from.

Two credible indices, two different answers

The Redfin index uses a repeat-sales method, tracking how the price of an individual home has changed since its own previous sale. The publisher describes it as comparable to the S&P Case-Shiller indices but reported about a month earlier. Our own national row uses a typical-home-value series instead, and it puts annual growth at 2.2% rather than 3.7%. Neither number is wrong. A repeat-sales index follows the same houses and strips out changes in what is being sold; a typical-value series tracks the middle of the whole stock and moves when the mix moves. A 1.5 percentage point gap between two honest methods is the normal size of that difference, and it is worth knowing which one a headline is quoting.

What the level looks like

The national asking price averages about 2,411 dollars per square metre on a listings-based measure redistributed by the Federal Reserve Bank of St. Louis. On the typical-value pairing, a home worth 369,678 dollars rents for about 1,948 dollars a month, a gross rental yield of 6.32% and 5.65% after the standardised 10.66% effective tax on non-resident rental income. That gross figure is well ahead of Germany at 4.07% and France at 5.35%. Transaction costs are about 6.9% of the price, well below France at 9.1%, Germany at 12.3% and South Africa at 14%, and prices are up 85.2% over ten years and 28.9% over five. On a valuation basis the country scores 57 out of 100, where a higher number means a more stretched market.

Sources: Redfin, Redfin Home Price Index, August 2026, published 22 September 2026 https://www.redfin.com/news/home-price-index-august-2026/

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