Median home prices in the United States finally fell last month, according to a new report.
Of the 50 largest metropolises, 47 saw reductions compared to this time last year. with three in particular leading the wayRealtor.com reported.
The cities, located in Florida, North Carolina and Phoenix, have seen home prices fall by as much as $100,000.
The declines contrast with price increases seen during the pandemic, when mass migration disrupted the city’s real estate markets.
Data shows markets in several of these hubs are cooling, as experts point in part to high mortgage rates.
The largest declines in home prices were seen in Tampa, Charlotte and Phoenix.
Of the 50 largest metropolitan areas in the United States, 47 experienced declines compared to the same period last year, according to a recent report, and three in particular led the way. Tampa, which experienced the largest price drop, is here
“Rates remain higher than expected, which means there is less buyer activity,” said Realtor.com senior economist Ralph McLaughlin.
‘Second, the prospect of lower mortgage rates this fall may have induced some buyers to wait.
‘This combination has led sellers to lower their prices to attract more buyers.’
Of the places where this phenomenon is being felt the most, McLaughlin said, “These are places where sellers have had a good run over the last few years with rising prices, but with the effects of higher rates fully sinking in, sellers are having to come back to reality with their price expectations,” he said.
The Federal Reserve signaled that a rate cut could be on the horizon in September as inflation continues to cool.
Meanwhile, as mortgage rates remain high, sellers will suffer, according to experts interviewed by Realtor.com, while prospective buyers will reap the benefits.
This is already being seen in places like Tampa, where a five-bedroom, three-bathroom home, priced at $664,000 in February, has since been reduced by $119,000.
In Tampa, a five-bedroom, three-bathroom home that was listed for $664,000 in February is now on the market for $545,000.
The price of the house has been reduced seven times, including a $33,000 reduction on July 31.
Realtor.com found the 2,624-square-foot home is now selling for $545,000.
The report estimates that the overall price decline in the Gulf Coast city was 9.7 percent, meaning a home that would have cost half a million dollars a year ago would be priced at around $450,000 today.
The next biggest price reduction was in Charlotte, where a three-bedroom, 2.5-bathroom home originally listed for $339,990 on July 23 is now down to $324,900.
Realtor.com recorded a 9.5 percent drop in prices in the city compared to the same period last year.
In Charlotte, Realtor.com reported a 9.5 percent price decline compared to this time last year.
In Charlotte, a three-bedroom, two-and-a-half-bath home originally listed for $339,990 on July 23 has already been reduced in price to $324,900.
Phoenix, with one of the fastest-growing populations of any U.S. city, saw its median home price drop 9.4 percent from a year ago, Realtor.com found.
A three-bedroom, two-bathroom home that was listed for $520,000 earlier this year is now selling for $495,000 after four price reductions.and the last one on July 19.
Mortgage rates soared over the course of just 16 months in 2022 and 2023, the result of an aggressive Fed campaign to address then-rampant inflation.
During that time, the bank approved 11 rate increases, the fastest pace of adjustment in decades.
Phoenix, with one of the fastest-growing populations of any U.S. city, saw its median home price drop 9.4 percent from last year, Realtor.com found.
A three-bedroom, two-bathroom home that was listed for $520,000 earlier this year is now selling for $495,000 after four price reductions, the last on July 19.
Experts have blamed the rate hikes for creating a “golden handcuffs” effect in the housing market, leaving sellers who secured lower rates reluctant to sell.
That left limited supply and fewer options for buyers, although Realtor.com suggests that even a minor change in rates can dramatically alter the median price.
Federal Reserve Chairman Jerome Powell predicted on Wednesday last week that interest rates could be cut as early as September.
