These housing markets are seeing the largest drop in prices since the pandemic peak

A conceptual illustration depicting housing construction in the United States. via Getty Images

Fast-rising mortgage rates have more than doubled this year. Combine that with a record surge in house prices and many potential buyers have been squeezed out of the market.

But recent data from a mortgage loan data specialist offers some relief.

Each month, the Black Knight Mortgage Monitor looks at a variety of issues related to home prices, affordability and inventory across the country.

Data from August 2022 showed that house prices continue to fall from pandemic peaks – and that one area of ​​the country in particular is seeing the sharpest decline.

house prices fall

Data showed that median home prices fell 0.98% in August 2022, after declining just over 1% in July.

Also Read :  Down 45% in This Bear Market, Can Digital Realty Trust Recover in 2023?

“The housing market has not seen such a significant two-month price decline since shortly after Lehman Brothers collapsed in the winter of 2008,” Black Knight said in its report.

Lehman’s bankruptcy in September 2008 marked the beginning of the global financial crisis and was a major trigger of the financial crisis. It was the largest bankruptcy in U.S. history to date, with Lehman listed as having $639 billion in assets at the time.

Overall, the median home price is down 2.2% from its peak in June, trading at around $8,800. However, due to record growth in late 2021 and early 2022, prices are still up 12.1% year-on-year.

Time will tell what these home prices will do as the market enters its natural downseason.

Where house prices fall

Prices have fallen from peaks in 97 of the country’s 100 largest markets, including all of the top 50.

The biggest declines continue to be concentrated on the West Coast, but cracks are beginning to form elsewhere, Black Knight said.

San Jose saw the sharpest drop in average home prices, down 13%, followed by San Francisco, down 10.8%, and Seattle, down 9.9%.

Las Vegas, Austin, Minneapolis, Washington, Raleigh and Nashville have also lost 3% or more in property values ​​in recent months, and that list of non-Western markets is likely to continue to grow, Black Knight said.

The Southeast and Midwest are seeing a slight decline, with Detroit seeing a 2.5% decline.

The Midwest also has some of the cities that have become some of the cheapest right now, requiring a pay-to-income ratio of around 25%.

Also Read :  UK's new finance minister seeks to calm markets, hints at end of Trussonomics

A well-known mortgage payment method states that homeowners spend 28% or less of their gross monthly income on housing. The least affordable markets, mainly on the West Coast, all charge about twice as much to buy a home at the median price – with Los Angeles topping the list at a whopping 72%.

San Francisco will likely be the first market to see annual home prices fall year over year as prices, which rose up as much as 19.5% earlier in the year, were essentially flat through late August, Black Knight said.

Neighboring San Jose is likely in a similar position.

This story was reported from Detroit. The Associated Press contributed to this.

Source

Leave a Reply

Your email address will not be published.