UK
05/08/2024
Median home prices in the US finally fell last month, according to a new report.
Of the 50 largest metros, 47 saw reductions from this time last year - with three in particular leading the way, Realtor.com reported.
The cities, located in Florida, North Carolina, and Phoenix, have seen home prices drop by as much as $100,000.
The decreases contrast the price hikes seen during the pandemic, when mass migration threw city housing markets for a loop.
Markets in several of these hubs are now growing cold, data show, as experts point in part to high mortgage rates.
The biggest reductions in home prices were seen in Tampa, Charlotte, and Phoenix.
Of the US's 50 largest metros, 47 saw reductions from this time last year, a recent report found - with three in particular leading the way. The city of Tampa, the city that saw the biggest price dips, is seen here
'Rates remain higher than expected, which means there is less buyer activity,' Realtor.com senior economist Ralph McLaughlin said.
'Second, the prospect of lower mortgage rates coming this fall may have induced some buyers to wait.
'This combo has led sellers to lower their prices in order to attract more buyers.'
Of the locations where this phenomenon is being felt the most, McLaughlin said:'These are places where sellers have had a good run over the past few years with rising prices, but with the effects of higher rates fully settling in, sellers are having to come back down to earth with their price expectations,' he said.
The Federal Reserve signaled that a rate cut could be in the cards come September as inflation continues to cool.
In the interim, as mortgage rates remain high, sellers are set to suffer, experts interviewed by Realtor.com said - while prospective buyers reap the benefits.
This is already being seen in places like Tampa, where a five-bedroom, three-bathroom house which was priced at $664,000 back in February has since been reduced by $119,000
There, a five-bedroom, three-bathroom house which was priced at $664,000 back in February is now priced at $545,000 - a $119,000 reduction
This cut came after the home's price was reduced a grand total seven times, including one to the tune of $33,000 on July 31, just a few days ago
The 2,624-square-foot home can now be yours for $545,000, Realtor.com found - and that's just the asking price.
The website, in turn, pegged the Gulf Coast city's overall reduction in terms of percentages at 9.7 percent - meaning a home that would cost you half a million a year ago would be priced around $450,000 today.
The next biggest price reduction was recorded in Charlotte, where athree-bedroom, 2.5-bath originally listed for $339,990 just a few days ago, on July 23, is already down to$324,900.
That's a dip of $15,090 in a matter of days, or a little less than five percent.
From this time last year, Realtor.com found the number for the North Carolina city was also more than nine percent -9.5 to be exactly.
That comes after 113 were pegged as moving to the city daily in the wake of the pandemic, after already flocking to the burgeoning locale in years before.
The next biggest price reduction was recorded in Charlotte, which recorded a 9.5 percent dip from last July
There, this three-bedroom, 2.5-bath originally listed for $339,990 just a few days ago is already down to $324,900
The third best performer when it came to price reductions was none other than Phoenix, one of the fastest growing cities in terms of population in the country.
The sweltering city recorded a 9.4 percent price reduction in median home price from last year, Realtor.com found - before pointing to an impressivethree-bedroom, two-bath previously listed at the start of the year for $520,000.
Within the seven or so months since, its price tag has been slashed four distinct times, with the latest coming only a few weeks ago on July 19.
That reduction clocked in at $4,600, and put a cap on an overall dip of $25,000.
The house is now listed for $495,000 - right around the median home sales price for the overall US, which as of the second quarter of 2024, was $412,300.
However, this is in one of the hottest - figuratively, not literally - housing markets in the country, now seemingly cooling slightly.
That said, mortgage rates were not the only reason said to be scaring buyers off, according to experts interviewed by the publication - withJennifer Vokolek, a realtor in increasingly popular Dallas, pointing to the upcoming election.
'Folks seem more focused on the outcome of the election than rates,' the Re/Max DFW Associates staffer said.
The third best performer when it came to price reductions was none other than Phoenix, one of the fastest growing cities in terms of population in the country.
The sweltering city recorded a 9.4 percent price reduction in median home price from last year, Realtor.com found - before pointing to an impressive three-bedroom, two-bath previously listed at the start of the year for $520,000, but has since dropped to$495,000
Meanwhile, mortgage rates spiked over the course of just 16 months in 2022 and 2023 - the result of an aggressive campaign by the Fed to address then rampant inflation.
Within that span, the bank signed off on 11 increases - the fastest pace of tightening in decades.
Experts have credited this with creating a 'golden handcuff' effect in the housing market, leaving Sellers who locked lower rates hesitant to sell.
Thus has limited supply and left less options for buyers - though as the statistics compiled by Realtor.com suggest, even a minor change in mortgage rates can drastically swing the median price people are paying.
Federal Reserve Chair Jerome Powell on Wednesday forecast that interest rates could be cut as soon as September. if the U.S. economy follows its current path and inflation continues to lessen.
