Decrease of Over 5% in House Prices Observed in Six Cities
House prices in some of the most expensive areas in the country fell in June, as homebuyers struggled with high mortgage costs, according to new data from Zillow.
Out of the 30 largest metropolitan housing markets analyzed by Zillow, six cities experienced price drops of over 5 percent compared to the previous year. In Austin, Texas, home prices declined by 10.45 percent between June 2022 and June 2023, and by 10.55 percent from the pandemic peak. San Francisco, California, saw a 9.17 percent drop during the same period.
In Sacramento, California, prices fell by 6.87 percent, and in Phoenix, Arizona, they plunged by 6.74 percent. Las Vegas, Nevada, experienced a decline of 6.67 percent. Seattle, Washington, also saw a drop of 6.52 percent in June 2023 compared to the previous year.
These cities were among the most expensive in the country before affordability issues impacted demand and prices. However, only Austin reported a 0.21 percent decrease in home prices between May and June 2023, with an average home price of $567,255.
On a national level, the average price of a U.S. home increased to $348,853 in June, up 1.2 percent from the previous year. Zillow’s senior economist, Jeff Tucker, attributed the rising prices to low inventory levels.
Mark Stayton, senior public relations specialist at Zillow, noted that typical home values are currently at an all-time high and growing at a normal rate. Although high mortgage rates have pushed many buyers out of the market, those who remain face limited options, driving price pressure upwards.
The current trend in the housing market indicates a reluctance among homeowners to list their properties, as they choose to hold onto their houses amidst low mortgage rates. Consequently, this has resulted in a decrease in sales as potential buyers are unable to purchase homes that are not available on the market.
Regarding the considerations of both buyers and sellers, affordability emerges as the primary factor in the decision-making process. According to Stayton, markets that experienced the most significant slowdown in the past year are often those with high price tags or those that witnessed dramatic increases in home values during the pandemic. The decline in home values within these areas signifies progress towards achieving a more balanced market. Nevertheless, it is noteworthy that homeowners in these regions still hold substantial equity accumulated over the past few years.