US Home Price Growth Falls Behind Inflation in August

U.S. home prices rose just 1.5% in August compared with the year before, marking the slowest annual gain in over two years. 

The inflation rate during that same period stood around 3%, meaning homeowners’ real wealth is declining. 

Cooling Market Signals

Most metro areas saw slim gains, and many Sun Belt regions even experienced price drops. Tampa, for example, recorded a 3.3% annual decline. 

Meanwhile, inventory is rising, and mortgage rates remain elevated—factors that point to a maturing housing market. 

Why This Matters

For years, home prices surged ahead of inflation, boosting household wealth. Now that trend has reversed, and many homeowners are seeing their asset values erode in real terms. 

Yet while growth has slowed dramatically, prices are still well above pre-pandemic levels. This means sellers may hold onto higher values, and broader declines remain unlikely. 

What Comes Next

As mortgage rates edge lower and supply grows, analysts expect a more balanced market ahead. But any meaningful drop in prices will depend on demand weakening further or rates rising again.