Home prices have started to drop in these 10 cities, according to Realtor.com

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An influx of smaller single-family homes — coupled with lower demand amid higher mortgage rates — has depressed home sales and prices in some markets. (Stock)

Although the low housing stock continues to pose a problem for home buyers, rising mortgage interest rates appear to be dampening demand and stabilizing home prices in some regional markets, according to a new report from Realtor.com.

“Many potential buyers are being shut out of home ownership because higher mortgage rates mean higher monthly housing payments,” the report said. “But when there are fewer buyers vying for homes and bidding, prices generally go down.”

Yet these smaller price declines “do not portend another crash” like the 2008 housing bubble that spurred the Great Recession. Some of these declines can be attributed to fewer larger homes on the market and an increase in new listings.

To determine where asking prices fell the most, Realtor.com analyzed median annual changes in list prices in the 100 largest cities in March. Then they narrowed down their list to just one city per state. Keep reading to find out where today’s homebuyers can score a great deal, and visit Credible to compare mortgage rates for free without affecting your credit score.

RENT PRICES ARE EXPECTED TO RISE IN ALL US MARKETS IN 2022: FREDDIE MAC

Where real estate listing prices fell the most in March

Realtor.com found that housing prices have begun to decline in many small Rust Belt towns, as well as some of the nation’s largest metropolitan areas. Here are the median listing prices across the top 10 cities in the study, along with the year-over-year price change:

  1. Toledo, Ohio: $115,000 (-18.7%)
  2. Rochester, New York: $149,000 (-17%)
  3. Detroit: $75,000 (-15.4%)
  4. Pittsburgh: $230,000 (-13.7%)
  5. Springfield, MA: $239,900 (-5.8%)
  6. Tulsa, Oklahoma: $220,000 (-5%)
  7. Los Angeles: $985,000 (-5%)
  8. Memphis, TN: $173,500 (-4.6%)
  9. Chicago: $399,000 (-3.7%)
  10. Richmond, Virginia: $310,000 (-3.4%)

Low inventory and rapid growth in real estate prices have caused residents of some cities to be excluded from their own real estate markets. George Ratiu, economist at Realtor.com, said several of the metros with falling home prices have unemployment rates well above the national average.

Buyers in these markets “could face greater affordability issues due to rising mortgage rates” despite falling prices, Raitu said. The average 30-year mortgage rate exceeded 5% in March for the first time since 2018, causing monthly mortgage payments will skyrocket among new borrowers in 2022 so far.

If you’re considering buying a home now, it’s more important than ever to compare interest rates from multiple mortgage lenders to find the best deal for your financial situation. You can get free mortgage rate quotes in Credible’s home loan market.

SMART REAL ESTATE ADVICE FOR BUYERS AND FIRST-TIME HOME SELLERS

Estate agents explain what’s happening in their local real estate markets

While housing problems in some Rust Belt markets can be attributed to higher unemployment and increased inventory in the market, this is not the case everywhere.

In Los Angeles, high house values have historically kept many residents stuck in the rental market. And local real estate agent Rafael Oseguera said rising interest rates are fueling the fire of affordability, with potential buyers reaching their tipping point as mortgages become more expensive.

“There’s still not a lot of inventory; there’s still auctions,” Oseguera said. “It’s just not as aggressive as it was three or four months ago.”

Despite the slight cooling in some markets, bidding wars still discourage home buyers in other cities. Competitively priced homes in Pittsburgh continue to receive multiple offers, often from out-of-town buyers looking for a bargain.

– Bobby West, a Pittsburgh-based real estate agent

FED ECONOMISTS WARN TO ‘BREW US HOUSING BUBBLE’ AS HOME VALUES CONTINUE TO RISE

Lower listing prices do not necessarily signal the disappearance of all regional markets. In Richmond, the scarcity of housing inventory has kept demand high – especially in the entry-level price for home buyers.

To help with marketing (and prevent properties from selling well above appraised value), listing agents in Virginia’s capital began undervaluing homes. That’s according to Jenny Maraghy, CEO and founder of a local real estate agency.

“If I know I’m going to get $325,000 for a house, I’m probably going to price it at $299,000 and let it come up on the market,” Maraghy ​​said. “The biggest mistake we can make is overpricing.”

With prices down slightly in some U.S. markets, aspiring homeowners may be able to take advantage of increased housing affordability. If you are ready to bid on houses, you can visit Credible to begin the mortgage pre-approval process. Additionally, you can browse the current mortgage rates in the table below.

ZILLOW EXPECTS LIMITED INVENTORY, HIGH HOME PRICE APPRECIATION THROUGH 2024

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