If you live in either Boise, Idaho or Austin, Texas, there is some great news for buyers: Redfin [1] is reporting that homes in those two cities are selling for about $80,000 less than they were a year ago.
This news comes as the median home sales price in the U.S. fell 4.1%, or $17,603, year-over-year to a median $408,031. This represents the biggest drop on record in dollar terms and the largest decline since January 2012 in percentage terms.
This drop also marks the third consecutive month of year-over-year declines following roughly a decade of increases.
According to Redfin, home prices fell from a year earlier because elevated mortgage rates hampered homebuyer demand, but also because prices were near their all-time high at the same time last year. The median sales price in April 2022 was $425,634, just under the record of $432,109 set in May 2022.
The steepest declines were in expensive California markets and pandemic boomtowns, where prices soared to unsustainable levels during the pandemic and are now coming back down to earth. The Oakland, California metropolitan area saw the biggest dip (-16.1% or $174,500 year-over-year); followed by Austin, Texas (-15.3% or $85,000; Boise, Idaho (-15.1% or $80,000); San Francisco (-13.4% or $220,000); and Salt Lake City, Utah (-10.9% or $60,000). In percentage terms, all five metros of the previously mentioned metropolitan areas posted record declines in April, with the exception of Boise, which posted the second biggest drop on record (the biggest was in March). Redfin began recording this dataset in 2012.
It appears that high mortgage rates are keeping both buyers and sellers on the sidelines—new listings drop 26.1% year-over-year on a seasonally adjusted basis in April due to the lock-in effect. That’s the second largest decline on record aside from April 2020 when the COVID-19 pandemic bungled up the housing market. New listings were also at the lowest level on record aside from April 2020.
“Elevated mortgage rates are preventing would-be buyers from buying and would-be sellers from selling. And because sellers aren’t selling, the buyers who are out there have very limited options,” said Redfin Chief Economist Daryl Fairweather [2]. “Home prices are faltering due to sluggish homebuyer demand, but the shortage of homes for sale is preventing them from falling as much as they did in the Great Recession. In some places, there are so few listings that prices are actually rising as a limited pool of buyers competes for an even more limited pool of homes.”
Additionally, pending home sales fell 21% year-over-year in April, a notable improvement from the record 36.1% decline in the fall. Pending sales rose 3.1% from March, the first month-over-month increase since December and the largest increase since September 2021.
Click here [3] to view the report in its entirety, including breakdowns for notable metropolitan areas.