Why US home prices aren't falling despite a sluggish market

US home prices rose 0.27% month over month in July on a seasonally adjusted basis, essentially flat from a 0.28% gain in June, according to the Redfin Home Price Index (RHPI).

Year-over-year, prices climbed 3.4%, the fastest annual pace in a year, even as mortgage rates holding in the mid-to-high 6% range throughout the summer have continued to suppress demand from ordinary buyers.

The RHPI, which uses a repeat-sales methodology to measure price changes for single-family homes across the three months ending July 31, suggests the market is leveling off rather than correcting.

Hundreds of thousands more homes are listed than there are active buyers to absorb them nationally, yet that supply overhang has not been enough to tip prices negative in most major metros.

"Despite the sluggishness of the overall housing market, home-price growth is proving to be surprisingly resilient," said Chen Zhao, Redfin's head of economics research.

"That's partly because today's market is split in two: Many everyday buyers are constrained by affordability challenges, while wealthy buyers have the means to keep competing for desirable homes. That upper-end strength is helping prop up prices even as the broader market cools, giving buyers some bargaining power."

AI money and affluent buyers are leading the national gains

San Francisco led all major metros with a 1.5% month-over-month gain and a 13.3% year-over-year surge, the sharpest annual increase in Redfin's dataset of 49 metros.

Oakland followed at 1.3% month over month, powered by the same Bay Area dynamics that drove a sharp rise in demand and median sale prices as AI-sector hiring accelerated across the Bay Area.

West Palm Beach posted a 0.9% monthly gain and an 8.9% annual increase as affluent buyers competed for luxury listings largely unconstrained by rate sensitivity. Pittsburgh and New York each added 1% month over month.

Ali Mafi, a Redfin Premier agent in San Francisco, previously said that the city's trajectory had reversed completely from earlier pessimism.

"There was this hysteria a few years ago that people were leaving San Francisco in droves and the housing market was going to crash. That wasn't true then and it's the opposite of true now. They're bringing so much money into the housing market — especially the luxury market," Mafi said.

He noted some luxury properties were receiving dozens of offers. The pattern mirrors how wealthy buyers pushed luxury home prices higher through the first half of 2026 despite elevated rate headwinds.

Where buyers are gaining the upper hand

Twenty of the 49 metros analyzed posted monthly price declines. Montgomery County, Pennsylvania, led the pullback at -1.1%, followed by Fort Worth at -0.8%, and Austin, Miami, and Virginia Beach each falling 0.6%.

Texas dominated the year-over-year correction: San Antonio dropped 2.1%, with Fort Worth, Dallas, and Austin each down roughly 1%. In those markets, sellers outnumber buyers by approximately two to one, a ratio that has forced list-price reductions and handed buyers negotiating room not available elsewhere.

That dynamic contributed to US home sales falling to their lowest level in nearly two years in July, with Texas and Seattle driving the decline.

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