Home prices are falling in major cities in the South, but don’t necessarily interpret that as a big opportunity to purchase a home.
Nationwide, the median price of a home listed for sale fell 0.9% year-over-year in June to $445,000, according to a study by Realtor.com released Thursday.
That’s the first drop since 2017 when the company started tracking this data. A separate report by the National Association of Realtors said existing home prices fell in May to the lowest level since December 2011.
Yet would-be home buyers are not likely to find a lot of deals because there simply weren’t enough homes on the market: The number of homes for sale fell by nearly 26% over last year, Realtor.com said.
“The first year-over-year decline in median list prices this month wasn’t unexpected,” Danielle Hale, chief economist at Realtor.com said.
One reason: high mortgage rates. The 30-year rate was averaging 6.75% as of last week, according to the Mortgage Bankers Association.
Although prices dropping “could feel like a welcome relief for buyers,” she added, it “may not be enough to noticeably bring down costs until the end of the year as inflation and rates start to fall too.”
But it’s still an opportunity for aspiring homeowners. “If buyers see homes sitting on the market for a while that haven’t received many good offers, there may be some opportunities for further negotiations,” said Clare Trapasso, executive news editor at Realtor.com.
“It never hurts to ask a seller if they would be willing to reduce their price a little, contribute to closing costs, or even buy down their mortgage rate,” she added.
Out of the 50 largest metros in the U.S., 15 saw home prices fall in June, Realtor.com said. Home prices fell the most in Austin, by 6.8% year-over-year, followed by Houston, at 5.1% and Raleigh, N.C., at 4.2%.
Homes in Detroit and Dallas rounded out the top five major metro areas where home prices fell the most in June 2023.
About a third of home listings in Austin had their prices cut, the most among all the top 50 metro areas in the U.S. San Antonio and Nashville followed, where 23% and 21% of homes listed in those areas had their prices slashed.
Realtor.com also said that San Antonio, Memphis, and Jacksonville saw the biggest jump in the share of homes that had their prices cut.
San Antonio, for instance, saw an annual 8.3% rise in the percentage of homes that had price reductions, Realtor.com said.
Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.
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