Home News 6 US Cities Where Real Estate Prices Are Falling

6 US Cities Where Real Estate Prices Are Falling

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  • A handful of cities were the first to show the collapse of the housing market as buyer demand dwindled.
  • The six cities listed here are some of the largest cities in the United States and have been in high demand in recent years.
  • Rising mortgage rates and slowing sales suggest more cities will join the fray by 2022.

The scorching housing market has calmed down, meaning house prices are finally cooling.

Fierce buyer competition has pushed home prices up across the U.S. over the past few years, but as affordability declines, Demand is declining rapidlyIn fact, housing costs are skyrocketing extruded Many prospective buyers lead to a slowdown in home buying activity.

In just a handful of cities, the recession has already led to falling home prices.data released on Tuesday S&P Dow Jones Indices showed that price growth turned negative in six metropolitan areas from May to June.

The following table shows the percent change in house prices for 20 US cities from May to June and the price change from April to May.

California hosted three of the six cities whose home prices fell in June. Los Angeles, San Francisco and San Diego all experienced negative price gains throughout the month, reversing course from their steady gains in May.

Prices fell the most in Seattle, where the S&P CoreLogic Index fell 1.9% through June. Neighboring to the south, Portland fell 0.1%, barely joining the group of cities experiencing falling house prices. Denver also fell 0.1%.

At the national level, average home prices rose 0.6% in June to about $308,000. That showed housing inflation was still widespread, but the rise was slower than the 1.6% rise seen through May. has also slowed down.

The median price is still the highest on San Diego’s list, with an average home sales price of $425,000 despite the drop in June. Los Angeles and Seattle follow closely behind, showing that the most expensive markets offer significant discounts first.

Conversely, some of the cities with the lowest average prices were characterized by the strongest price increases. Cleveland maintained its position as the cheapest city in the country with an average home sale price of $174,000. However, prices rose 1.2% throughout the month, only easing slightly from May’s 1.9% gain. Detroit performed similarly, with June’s average selling price rising 0.9% to his $175,000.

The Pacific Northwest has experienced below-trend price gains over the past year as the Sun Belt flourished and the reopening of the economy lured Americans back to major hubs like New York City and San Francisco. As it weakened, relatively weak demand in the region opened the door for price cuts.

Future buyers can thank the Federal Reserve for the market slowdown.The central bank has cut interest rates at the fastest pace in 40 years in hopes of cooling demand and fighting inflation. I have lifted it. These rate hikes impacted the cost of borrowing across the economy, but few areas have responded as quickly as the housing market. Average 30-year fixed-rate mortgage rates are now nearly 2.5 percentage points higher than they were at the end of last year, with Fed officials repeatedly suggesting further increases later this year.

This has already driven some buyers out of the market. In July, new home sales nationwide slowest pace Over six years, it dropped to just 511,000 units by the end of the month. During the same period, existing home sales — a measure of sales volume and price of existing home inventory — plummeted for the sixth month in a row. hitting Only 4.81 million units were sold, the lowest level in two years.

As buyer demand dwindles, sellers lose leverage in the housing market.Percentage of sellers lowering their asking prices due to fewer people fighting over their homes strike All-time high for July.According to real estate database Redfin, more than 15% of all home sellers have Dropped Their asking prices in all major US housing markets for the month – highlighted amazing shift in the behavior of both home sellers and buyers.

“Sellers are accepting the fact that volatile mortgage rates are dampening demand,” said Chen Zhao, economic research leader at Redfin. Said in a housing report. “Some sellers are lowering prices, and some homeowners are uneasy about not getting a good offer or reluctant to give up low mortgage rates to maintain the status quo. doing.”

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