Two in five metros see home price declines in Q2 – NAR

"Affordability challenges are easing"

Two in five metros see home price declines in Q2 – NAR

Home prices continued to exacerbate affordability woes in 128 of 221 metros, but the number of markets that experienced price depreciation also grew in the second quarter, according to a new National Association of Realtors report.

Nearly 60% of US metros registered home price increases over the quarter. However, 41%, or two in five markets, registered home price declines, up from 31% in the first quarter.

The share of metro areas that reported double-digit price gains over the period dropped from 7% to 5% quarter over quarter.

The median price of a single-family existing home dipped 2.4% to $402,600 from a year ago and was down 0.2% from the previous quarter.

"Home sales were down due to higher mortgage rates and limited inventory," said NAR chief economist Lawrence Yun. "Affordability challenges are easing due to moderating and, in some cases, falling home prices, while the number of jobs and incomes are increasing. Just like the weather, large local market variations exist despite the minor change in the national home price."

Austin (19.1%) posted the largest decline in annual home prices, followed by San Francisco (11.3%), Salt Lake City (9.6%), and Las Vegas (7.4%).

"Interestingly, price declines occurred in some of the fastest job-creating markets," Yun noted. "Prices in these areas are trying to land on better fundamentals after several years of skyrocketing increases. In fact, the number of homes receiving multiple offers, alongside continuing job and wage gains, signal price slides may already be a thing of the past."

Meanwhile, the top 10 markets with the biggest year-over-year gains were:

  • Fond du Lac, Wis. (25.3%)
  • New Bern, NC (19.7%)
  • Duluth, Minn.-Wis. (14.6%)
  • Davenport-Moline-Rock Island, Iowa-Ill. (12.6%)
  • Allentown-Bethlehem-Easton, Pa.-N.J. (11.7%)
  • Kingsport-Bristol-Bristol, Tenn.-Va. (11.5%)
  • Peoria, Ill. (11.5%); Green Bay, Wis. (10.9%)
  • Trenton, N.J. (10.5%)
  • Cape Girardeau, Mo.-Ill. (10.4%).

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