As inflation and interest rates rise in tandem, the price of homes in certain United States cities begun to fall — or at least level off. According to Redfin Real Estate News, an increasing number of home sellers began lowering their asking prices this month, signalling a cooling in the recently red-hot housing market. Redfin attributes the drop to rapidly rising mortgage rates cutting into the budgets of prospective buyers, causing a drop in home buying sentiment given recessionary fears, stock market volatility, and the general air of economic uncertainty.
According to Redfin, the areas seeing the most price drops are the same areas that benefited most from soaring valuations at the beginning of the pandemic. Redfin explains, “price drops are especially common in mid-sized metros in the West–particularly in Utah–many of which had outsized price growth during the pandemic because they were hotspots for people moving in from other parts of the country.” Around the U.S., more than 10% of home sellers have dropped their price this month across all metro areas.
Fortune has dubbed this phenomenon “the Great Deceleration.” People who have recently listed put homes on the market are discovering the demand they anticipated isn’t quite there, forcing them to move down from their original asking prices. Given that the price of homes in the U.S. home prices rose an average of 34.4% over the last two years, topping the previous biggest two-year jump in home prices posted in the run-up to the 2008 mortgage crisis (21.2%), any slowdown is a welcome one to buyers, but sellers still seem to be adjusting their expectations.
It’s impossible to know when the exact “perfect” time to buy a house will be, but it looks like the days of heated bidding wars are winding down — particularly in these 10 U.S. cities, which saw the highest share of price reductions in the past month:
1. Provo, UT
- Home listings that saw price cuts: 47.8%
- Median sale price: $US550,000 ($763,510)
2. Tacoma, WA
- Home listings that saw price cuts 47.7%
- Median sale price: $US575,000 ($798,215)
3. Denver
- Home listings that saw price cuts: 46.9%
- Median sale price: $US614,000 ($852,355)
4. Salt Lake City
- Home listings that saw price cuts: 45.8%
- Median sale price: $US556,000 ($771,839)
5. Sacramento, CA
- Home listings that saw price cuts: 44.3%
- Median sale price: $US610,000 ($846,802)
6. Boise, ID
- Home listings that saw price cuts: 44.2%
- Median sale price: $US549,990 ($763,496)
7. Ogden, UT
- Home listings that saw price cuts: 42.6%
- Median sale price: $US500,000 ($694,100)
8. Portland, OR
- Home listings that saw price cuts: 42.0%
- Median sale price: $US570,500 ($791,968)
9. Indianapolis
- Home listings that saw price cuts: 41.9%
- Median sale price: $US285,000 ($395,637)
10. Philadelphia
- Home listings that saw price cuts: 41.2%
- Median sale price: $US290,000 ($402,578)
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