Buyers may begin to see home price declines in some areas. (Getty Images)
Homebuyers have watched home prices march higher for the past few years, but now many of you will finally experience some relief — at least in some places. “Home price increases have slowed dramatically in most markets, and there are even price corrections in some areas as home sales have declined significantly in recent months,” said Rick Sharga, executive vice president of market intelligence at ATTOM. (You can find the best mortgage rates you can get here.)
According to the US Affordability Report released by real estate data company ATTOM, some large counties are actually seeing double-digit price declines. Counties with at least 1 million residents where median prices fell the most from Q2 through Q3 2022 are:
Alameda County (Oakland, California), which is down 11%;
Travis County (Austin, Texas), which is down 9%;
Santa Clara County (San Jose, California, which is down 8%;
Contra Costa County (outside Oakland), which is down 7%; and
Fairfax County, Virginia (outside Washington, DC), which is down 7%.
Other data also shows a slowdown in the housing market. Using data from John Burns Real Estate Consulting, Fortune reports that among the 148 major regional housing markets analyzed, 98 have seen home values decline from their 2022 highs. “In our view, you’re going to see — and we’re seeing it right now — that house prices will fall even though supply levels aren’t skyrocketing,” Rick Palacios Jr., director of research at John Burns Real Estate Consulting, told the publication.
Check out the best mortgage rates you can get here.
Although some districts are seeing price declines, housing generally remains unaffordable for most. Mid-range single-family homes and condos remained less affordable compared to the historical average in 99% of counties nationwide in the third quarter of 2022, ATTOM data showed. “Home ownership remains largely unaffordable for the majority of homebuyers in most markets across the country,” said Rick Sharga, executive vice president of market intelligence at ATTOM.
And of course there is the problem of mortgage rates. Interest rates hit their highest level since 2007, and MarketWatch Picks asked five economists and real estate professionals what would happen next. As Danielle Hale, Realtor.com’s chief economist, put it, “Right now, it’s wise for buyers to prepare for the possibility of higher mortgage rates, especially when considering their home-buying budget.” available now can be found here.)
The takeaway is that while prices may drop, homebuyers shouldn’t hold their breath for a big pause. Sharga says: “While house prices are down a bit quarter-on-quarter, they are still higher than a year ago and interest rates have essentially doubled. Many prospective homebuyers simply cannot afford the home they wanted to buy and, in many cases, no longer qualify for the mortgage they would need.”
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