Homebuyers can breathe a little easier in some cities around the country where home prices are beginning to dip.
What Has Gone Up Beginning to Come Down
Everything is subject to the law of gravity…even home prices. Soaring beyond imagination in recent years, seemingly unstoppable home prices are beginning to wane in certain markets around the country.
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There are several factors involved in cooling home prices in parts of the country. Affordability, or rather, lack of affordability is a major challenge for homebuyers…but affordability has been a challenge for a while now.
Most industry experts point to rising interest rates that have raised monthly mortgage payments by at least +30% as the major reason that sellers are either cutting their original listing prices or posting original listing prices a bit under recent market sale prices. Simply, there are fewer buyers who are able afford “typical” home prices with increasing interest rates.
Smaller Homes Coming to Market
According to George Ratiu, manager of economic research for Realto.com, “Many of the metro areas seeing median list price declines have seen an (influx) of smaller homes come to market, which carry lower price tags. At the same time, several of the cities have unemployment rates , while still historically low, that are above the national level. (This indicates) that buyers may face steeper affordability challenges from rising mortgage rates.”
Ratiu and the vast majority of housing experts do not see falling house prices as a redo of the housing bubble of the Great Recession. No…wherever and how much home prices are beginning to slightly fall do not foreshadow another housing crash.
Ten Metros Where Home Prices Falling the Most
Realtor.com® gathered y/y median list prices in the country’s largest metros in March. The data team limited their selections to one metro per state in order to ensure geographic diversity.
- Toledo OH – median listing price – $115.000; -18.7% y/y
- Rochester NY – median listing price – $149,900,;-17.0% y/y
- Detroit MI – median listing price – $75,00; -15.4% y/y
- Pittsburgh PA – median listing price – $230,000; -13.7%
- Springfield MA – median listing price – $239,900,; -5.8% y/y
- Tulsa OK – median listing price – $220,000, -5.0% y/y
- Los Angeles CA – median listing price; – $985,000; -5.0% y/y
- Memphis TN – median listing price – $173,500; -4.6% y/y
- Chicago IL – median listing price; $399,000; -3.7% y/y
- Richmond VA – median listing price $310,000; -3.4% y/y
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Thanks to Realtor.com®.
