Economic signs point to a cool-down in the nation’s housing market. Twenty-eight property analysts polled by Reuters in May predicted U.S. home prices would rise 10.3% this year based on the Case/Shiller index. While that estimate may sound promising, it is well off from the current pace of around 20%. That means that prices in some markets will undoubtedly fall.
According to Realtor.com’s April data, demand for housing has continued to moderate as buyers have had to consider both rising home prices and rising mortgage rates. The average rate on a 30-year mortgage in the last week of May stood at 5.27%, according to Bankrate, more than double the 2.5% rate at the end of 2021. Meanwhile, median home list price grew in April to a new all-time high of $425,000, a 14% increase from last year.
Realtor.com’s data also shows that the number of listings that are in the process of being sold declined, and new listings have increased. Inventory is projected to grow compared to last year in the coming weeks.
While the national housing market seems to remain strong, these conditions, which favor buyers, have begun to take hold in some markets, where housing prices are under pressure. (Conversely, these are the metros where home prices shot up this year.)
To find the U.S. cities where home prices are falling, 24/7 Wall St. reviewed Realtor.com’s report Home Prices Have Begun Falling: Here Are the Cities Where They’re Down the Most. Realtor.com looked at the year-over-year change in median list prices in the 100 largest metros in March, limiting the list to just one metro per state for geographic diversity. Cities are ranked from the smallest fall in annual median listing price to the largest.
While median list prices have dropped in these cities, some of the metros noted here mirror the national trend of fewer homes listed for sale and homes remaining shorter times on the market. In these cases, often the reason for the lower median list price is that smaller housing units are coming on to the market.
Though nearly all these housing markets enjoyed a robust two-year period where prices shot up, the median list price in nearly all the cities on the list is well under Realtor.com’s national median list price in April. In many of these cities, some sellers are taking advantage of the high prices and trying to sell their homes. In these markets, listings are higher and homes remain on the market for longer. (These are the states with the worst foreclosure rates this year.)
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