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30% of Top US Housing Markets See Year-Over-Year Price Drops
You’ve undoubtedly noticed a change if you’ve been following the real estate news lately. The housing market in the United States is finally slowing down after years of explosive price increases. Additionally, it appears in the data and is not merely a blip.
In June, annual home price growth fell to 1.3%, the lowest level in two years, according to ICE Mortgage Technology. That represents a significant slowdown compared to just one month ago, and it is affecting about one-third of the 100 biggest home markets in America. Prices in several places are currently declining by over 1% annually, which hasn’t occurred on this magnitude in a long time.
However, this does not imply that a collision is imminent. However, it does indicate a change. The market is changing due to a number of factors, including expensive properties, high mortgage rates, growing inventory, and hesitant purchasers. This change is important if you intend to buy, sell, or simply comprehend the direction things are going.
I will thus explain in detail what is going on in this market, why prices are declining, and what this means for those of us who really live in it. The emotional toll this is having on regular homeowners and buyers who feel caught in the middle is something I’ll also show you that most headlines don’t mention.
Let s Look at the Numbers: What s Actually Happening?
The bottom line, if you’re trying to understand the headlines, is that the evidence is obvious. It’s not just talk that the housing market in the United States is slowing down.
In June, home price growth slowed to just 1.3% annually, according to CNBC. It’s the lowest we’ve seen in two years, down from 1.6% in May. Does it not sound like a lot? That is a major red signal in the housing industry.
Single-family home prices are just hanging on with 1.6% rise, but condo prices have already gone into negative territory, down 1.4% nationally. Borrowing costs are also a hindrance. For the majority of first-time buyers, affordability remains a concern because 30-year fixed mortgage rates are still in the high 6% level. Just a few years ago, buyers were locking in nearly twice as much.
What about stock? Compared to last year, it is up 29%. Although there are more houses on the market, they are not selling quickly. This is the precise reason why homes seem more available right now but no one is jumping.
Where Are Prices Falling the Most?
Not all of this sluggish creep is occurring equally. In fact, the market may feel entirely different depending on where you live.
Nearly one-third of the top 100 U.S. housing areas are currently experiencing yearly price declines of at least 1%, according to VIN News. That isn’t subtle. And it’s far more dramatic in some places.
Consider Florida’s Cape Coral. There, prices have plummeted by more than 9%, the biggest decline in the country at the moment. Prices are falling in California as well as Austin, Texas, and Tampa, Florida. It’s worse. Seven of the state’s ten largest markets are rapidly declining.
The fascinating thing is that the Midwest and Northeast are still making significant gains, even while the South and West are cooling off. Therefore, while other regions are retreating, bidding wars may still be going on in places like Boston or Cleveland.
Your zip code has a big impact. And to be honest, that makes it more difficult than ever to read this market.
What s Driving This Shift? The 4-Factor Convergence
Let’s break through the cacophony. Here are the main causes of this slowness. There are four things striking at once, not just one:
1. Home Prices Got Way Too High
We all witnessed it. Inventory was low, sellers were setting their own prices, and buyers were flooding in during the pandemic. Home values rose above what most people could reasonably afford as a result of that hysteria. It’s rectifying now.
2. Mortgage Rates Doubled
In the past, you could get a 30-year mortgage for less than 4%. You’re looking at almost 7% now. The monthly affordability is destroyed by that disparity. For many of us, a $400,000 home simply seems unaffordable.
3. Inventory Is Up
The number of residences for sale has increased by about 30% in the past year. More options may seem wonderful, but supply by itself won’t help anxious and overburdened shoppers.
4. Buyer Fatigue
People are fed up with excessive payments, erratic interest rates, and bidding wars. Given that there are still rumors of a recession, many people are opting to wait.
The bottom line? Both parties are under a great deal of financial strain, and there are more listings than active purchasers. The market is currently changing due to this peculiar mix.
Although we frequently concentrate on first-time buyers, it’s important to remember that more than 30 million homeowners in the US do not have a mortgage. This statistic is concerning to some economists since it distorts the dynamics of lending and housing.
Why Sellers Are Suddenly Hesitating?
You won’t see this in most headlines, yet many homeowners are opting not to sell despite increased inventory.
And I understand. You most likely locked in a lovely 3% mortgage rate if you purchased a home in 2020 or 2021. Just to move, why would you trade it for 7%? In terms of money, it doesn’t stack up.
This was even noted in the CNBC report by Andy Walden, chief of housing research at ICE. He said, Prices are falling in an increasing number of markets, and homes are taking longer to sell, which could make homeowners reluctant to list.
Put differently, sellers find themselves torn between wanting to cash out at the highest price and not wanting to reenter the market as buyers at the current prices. That s why we re seeing more delistings and fewer fresh listings, especially in places like Phoenix, Denver, and San Jose.
If you re feeling unsure about selling right now, trust me you re not alone.
Have you thought about selling your house but changed your mind? Share your thoughts or questions in the comments your experience might help someone else!
Who s Got the Power Right Now Buyers or Sellers?
To be honest? It depends on where you are.
If you re buying in places like Florida, Texas, or California, you ve got leverage. Homes are sitting longer, price cuts are more common, and sellers are finally open to negotiating. In many of those metros, over 30% of listings have already slashed asking prices.
But in the Midwest and Northeast, the story flips. Low supply and steady demand mean sellers still have the upper hand. You might still face competition there, even as the national market cools.
For sellers, this is a moment to get real about pricing. Overpricing in a declining market means your home might just sit and sit. If you re serious about selling, strategic pricing is more important now than ever.
And if you re a buyer? This could be your opening if you can stomach the mortgage rates. That s the trade-off we re all dealing with right now.
Want real-time updates on shifts like these across local markets? Some housing pros and buyers I know are keeping tabs through select WhatsApp real estate updates they re seeing helpful tips pop up before major news catches on.
Are We Just Getting Started Or Is This Temporary?
It s the question on everyone s mind: Is this a short-term dip or the start of something bigger?
Right now, the signs point to a slow but widening correction not a crash. ICE s data shows that more markets are tipping into negative price territory month after month. And with interest rates staying stubbornly high, this trend isn t likely to reverse overnight.
At the same time, we re starting to see a seasonal slowdown, which happens naturally in late summer and fall. So some of this cooling is normal. But the difference this year is the scale. It s not just a few cities it s almost a third of the top 100 markets.
Economists are split. Some say we ll see a soft landing as rates eventually come down. Others think we re heading into a longer adjustment, especially in overheated areas where prices shot up 40 50% during the pandemic.
If you re thinking of buying or selling, it s important to look at your local trends, not just the national ones. Because while the market is shifting, not everyone s riding the same wave.
For new buyers especially students or recent grads the idea of entering a fluctuating market can feel overwhelming.Here are 7 things no one tells you about buying a home as a studentthat can help you move forward with confidence.
What Should You Actually Do Right Now?
Let s cut to the chase. Here s what this all means for you whether you re buying, selling, or sitting tight.
If You re a Buyer
You finally have breathing room. Less competition, more listings, and price cuts in many markets mean you can negotiate again. But keep in mind high mortgage rates hurt. If you find a home that fits your budget and lifestyle, it s still worth considering. Just don t overextend yourself.
If You re a Seller
The peak frenzy is over. If you need to sell now, be smart about pricing. Overpricing will cost you time and leverage. Think strategy, not ego. And if you don t need to sell urgently, it might be worth watching the fall market before jumping in.
If You re a Renter
Rental markets haven t cooled as much but they re showing early signs. Some cities are seeing slight rent declines, especially where for-sale inventory is growing. If you re on a lease, now s the time to negotiate your renewal or shop around.
If You re an Investor
Watch the Sunbelt. Places like Austin, Tampa, and Phoenix are seeing declines but long-term fundamentals are still solid. This might be your window to buy in low, if you ve got the cash and risk tolerance.
No matter who you are, this market rewards patience, research, and honesty with your finances. Don t chase old highs and don t wait forever either.
If you re serious about buying soon, don t just hunt for listings get your paperwork right first.This guide breaks down 16 must-have documents and 6 you should never signwhen buying a home.
Why This Matters to the Whole Economy?
This housing shift isn t happening in a vacuum. It s deeply tied to the broader economy and it s sending signals.
First, real estate drives spending. When people feel confident about their home value, they spend more. When prices fall, that confidence drops. We ve seen this pattern before in past cycles.
Second, the housing slowdown affects jobs construction, lending, real estate agents, home services. And we re already seeing layoffs in mortgage firms and slower activity on new builds.
Moody s economist Mark Zandi even warned recently that the housing market is becoming a drag on the U.S. economy. If this cooling trend spreads further, it could ripple out into everything from consumer spending to GDP growth.
That s why even if you re not buying or selling right now, this still impacts your wallet, your job market, and your financial future. Housing isn t just about homes it s about momentum.
Final Thoughts
Let s be clear: the market isn t collapsing. This isn t 2008. Lending rules are tighter, buyer profiles are stronger, and most homeowners have plenty of equity.
But what we are seeing is a reality check.
Buyers are no longer willing to overpay. Sellers can t just name their price. And mortgage rates aren t likely to magically fall back to 3% anytime soon.
This correction is healthy but it s also uncomfortable. Especially if you re stuck between needing to move and feeling like the timing is all wrong.
If that s where you re at, know this: You re not alone. A lot of smart, responsible people are in the same boat right now trying to figure out what makes sense in a market that suddenly stopped playing by the old rules.
Stay grounded. Track your local trends. Talk to real people, not just headlines. And remember timing the market perfectly is nearly impossible. But making a smart move based on your life, your budget, and your timing? That s always a win.
Curious about how these market trends impact your home goals? Visit ourReal Estate & Homeownershipfor more smart guides, tools, and updates across the housing and real estate world.
Disclaimer:The insights shared in this article are based on current market data and expert analysis available at the time of writing. Housing trends can shift quickly, and individual situations may vary. Always consult a local real estate professional before making financial decisions.
Table of Contents
-
Let s Look at the Numbers: What s Actually Happening?
-
Where Are Prices Falling the Most?
-
What s Driving This Shift? The 4-Factor Convergence
-
1. Home Prices Got Way Too High
-
2. Mortgage Rates Doubled
-
3. Inventory Is Up
-
4. Buyer Fatigue
-
-
Why Sellers Are Suddenly Hesitating?
-
Who s Got the Power Right Now Buyers or Sellers?
-
Are We Just Getting Started Or Is This Temporary?
-
What Should You Actually Do Right Now?
-
If You re a Buyer
-
If You re a Seller
-
If You re a Renter
-
If You re an Investor
-
-
Why This Matters to the Whole Economy?
-
Final Thoughts
-
1. Home Prices Got Way Too High
-
2. Mortgage Rates Doubled
-
3. Inventory Is Up
-
4. Buyer Fatigue
-
If You re a Buyer
-
If You re a Seller
-
If You re a Renter
-
If You re an Investor
