House Prices are starting to fall in many American cities after nearly two years of rising, according to a report by real estate broker Redfin.
Single-family homes have experienced dramatic price increases since the COVID- and lockdown-driven recession. According to data from , the median U.S. home sales price for the first quarter of 2022 was $433,100. Department of Housing and Urban Developmentup 34% from $322,600 in Q2 2020.
But many of the cities whose home prices soared in the post-recession months have seen the steepest declines. About 70% of home sellers in Boise, Idaho, lowered their asking prices last month. Cities such as Denver, Colorado. Salt Lake City, Utah. In Tacoma, Washington, and Tacoma, home prices fell 58%, 56.4%, and 54.8%, respectively.
“Private home sellers and builders were quick to cut prices earlier this summer, largely because they had unrealistic expectations about both price and schedule. press release“They were priced too high because their neighbor’s house was sold for an exorbitant price a few months ago. They also expected to receive multiple offers in the first weekend. because I heard a story about
In fact, the National Association of Home Builders housing market index indicated that the United States had entered housing recession, all three components of the metric (Current Sales, Sales Forecast, and Prospect Traffic) have fallen to their lowest levels in the last two years. Robert Dietz, chief economist at NAHB, said that “tight monetary policy by the Federal Reserve and the continued rise in construction costs” caused the phenomenon.
According to Redfin, buyers are now expecting lower prices amid a cooling in the real estate market caused by rising mortgage rates and market expectations of falling prices.Indeed, 30-year fixed-rate mortgages have begun climbing By early 2022, according to data from freddie macwhich started at just over 3% in January, approached 6% in June and moderated to 5.1% on Monday.
Tampa, Florida. Phoenix, Arizona. and San Diego, California, where a number of sellers are also offering discounts. Among the cities with the lowest share of markdowns is McAllen, Texas. Newark, New Jersey. Miami, Florida; and El Paso, Texas.
“My advice to sellers is to get your home priced right the first time, accept that the market is slowing, and understand that it could take 30 days or more to sell,” Pendleton said. added Mr. “If someone sells a nice house in a desirable area, there is no need to lower the price.”
government mortgage company freddie mac House prices were recently projected to rise by 4% in 2023, a relative slowdown from 17.8% in 2021 and 12.8% in 2022.
“The Federal Reserve’s measures to help manage inflation have caused huge swings in mortgage rates and, in turn, the housing market,” said Sam Cater, chief economist at Freddie Mac. press release last month. “Although home price inflation has moderated, home prices remain high relative to homebuyers’ incomes. I have.”