Home Prices Fall in 11 of the 50 Most Populous US Metros: Report

San Antonio saw the largest decline in property prices, followed by Oakland and Jacksonville.

A home with a $23.5 million listing price for sale in Chicago on Nov. 13, 2023. Scott Olson/Getty Images

The median sales price of homes declined on an annual basis in 11 out of the 50 most populous metros in the United States for the four weeks ending April 20, real estate brokerage Redfin said in an April 24 statement.

Housing prices had previously decreased in the same number of metropolitan areas in September 2023.

“Home prices are falling in many major metros—and price growth is decelerating nationally—because many house hunters are backing off, but the number of homes for sale is holding up,” the brokerage said.

“Home tours are slowing, mortgage-purchase applications are falling, and Redfin agents in many parts of the country report that would-be buyers are ultra-cautious amid high housing costs and widespread economic uncertainty.”

San Antonio, Texas, registered the largest decline at 3.7 percent, followed by Oakland, California (3.5 percent), and Jacksonville, Florida (2.2 percent).

New listings are up by 9.6 percent on an annual basis, boosting inventory.

However, the median monthly housing payment is $2,848, only $8 less than the all-time high level. In addition, mortgage rates have risen from 6.62 percent to 6.83 percent in a span of just a week. Combined, they dissuade buyers from the market.

Redfin attributed the jump in mortgage rates to factors such as rising chances of a recession and economic instability, which are also deterring prospective buyers.

Company agents report that most of the activity they currently see in the housing market is largely coming from sellers, it said.

“There are always people who need to buy homes or sell homes, no matter what’s going on in the world. But with so much uncertainty in the economy, now is a time for those buyers and sellers to be more strategic than ever,” Chen Zhao, Redfin’s Economic Research Lead, said in a statement.

“My advice to sellers is to price your home fairly for the shifting market; you may need to price lower than your initial instinct to sell quickly and avoid giving concessions. On the flip side, buyers should negotiate on price and terms and shop around even more than usual for the best mortgage rates.”

Real estate marketplace Zillow expects home values to drop this year by 1.9 percent, according to a statement issued on April 18. This is a stark revision from the company’s previous expectations of prices rising by 0.6 percent.

Zillow sees the combination of elevated mortgage rates and rising home listings as a signal of potential price dips by the end of the year.

“With increased supply, buyers are gaining more options and time to decide, while sellers are cutting prices at record levels to attract bids,” it said.

Mortgage Rates

According to data from Freddie Mac, the average weekly rate on a 30-year fixed-rate mortgage has been fluctuating between roughly 6.5 percent and 7 percent for some time.

“Over the last couple of months, the 30-year fixed-rate mortgage has fluctuated less than 20 basis points, and this stability continues to bode well for buyers and sellers alike,” Freddie Mac chief economist Sam Khater said in an April 24 statement.

In an April 24 commentary, Lisa Sturtevant, chief economist at real estate data company Bright MLS, wrote that mortgage rates are likely to “jump around quite a bit” in the coming months.

“Buyers need to be prepared to work with a lender to be able to lock-in when rates do come down. While some buyers were hoping to wait for mortgage rates closer to 6 percent, it is likely that rates will still range in the mid-6 percent range at least into the summer,” she wrote.

Meanwhile, people are watching out for decisions taken by the Federal Reserve to gauge potential swings in mortgage rates.

The central bank has so far kept interest rates unchanged this year, maintaining them in a range of 4.25 percent to 4.5 percent. Over the past three meetings, the Fed has paused its rate-cutting decisions.

President Donald Trump has been criticizing Fed Chair Jerome Powell over the central bank’s lack of monetary policy easing.

“'Preemptive Cuts’ in Interest Rates are being called for by many,” the president wrote in an April 21 post on Truth Social, adding that unless Powell decides to lower interest rates, there could be a “SLOWING of the economy.”

The next meeting of the Federal Open Market Committee is scheduled for May 6–7. The vast majority of interest rate traders are not expecting rate cuts in the May meeting, according to data from the CME FedWatch tool.