Home Prices Level Off Amid High Mortgage Rates: 11 Cities Where Prices Are Falling

Home Prices Level Off Amid High Mortgage Rates: A Look at the Cities Where Deals Are Emerging

As the housing market grapples with persistently high mortgage rates, a surprising trend is emerging: home prices are beginning to stabilize and even decline in some of America’s largest cities. According to a recent report from Realtor.com, the median home price reached $442,500 in May, a figure that reflects a slight increase from last year’s $441,000. However, the landscape is shifting, with 20 of the 50 largest metropolitan areas experiencing annual price drops.

Leading the charge in price declines is Miami, where the median home price has plummeted by an astonishing 11.2% year-over-year, now sitting at $439,000. This significant drop may catch potential buyers off guard, especially in a market where high mortgage rates have made homeownership increasingly challenging.

Realtor.com Chief Economist Danielle Hale notes that while home prices are stabilizing, the impact of elevated mortgage rates cannot be overlooked. “Higher mortgage rates compared with last May still increased the monthly cost of financing 80% of the median home by roughly $158 compared with a year ago,” Hale explains. This increase has raised the required household income to purchase a median-priced home by $6,400, bringing it to approximately $119,700 when accounting for taxes and insurance.

Despite these financial hurdles, homebuyers may find opportunities in cities where prices are trending downward. Here are the top 11 markets where potential deals may be hiding:

1. Miami, FL

   • Median Home Price: $439,000
   • Year-over-Year Change: -11.2%

2. Denver, CO

   • Median Home Price: $639,000
   • Year-over-Year Change: -6.3%

3. Seattle, WA

   • Median Home Price: $770,000
   • Year-over-Year Change: -5.5%

4. Phoenix, AZ

   • Median Home Price: $440,000
   • Year-over-Year Change: -4.9%

5. Cleveland, OH

   • Median Home Price: $339,000
   • Year-over-Year Change: -4.3%

6. San Francisco, CA

   • Median Home Price: $1,469,000
   • Year-over-Year Change: -4.0%

7. Tampa, FL

   • Median Home Price: $425,000
   • Year-over-Year Change: -3.2%

8. Baltimore, MD

   • Median Home Price: $565,000
   • Year-over-Year Change: -3.1%

9. Detroit, MI

   • Median Home Price: $260,000
   • Year-over-Year Change: -3.0%

10. Indianapolis, IN

    • Median Home Price: $348,000
    • Year-over-Year Change: -2.6%
11. Atlanta, GA
    • Median Home Price: $462,000
    • Year-over-Year Change: -2.6%

While the high mortgage rates continue to strain buyers’ budgets, the softening prices in these cities may provide a glimmer of hope for those looking to enter the housing market. As potential homeowners navigate this complex landscape, targeting areas with declining prices could help alleviate some of the financial pressures associated with purchasing a home in today’s economy.

As the market evolves, it remains to be seen whether these price adjustments will translate into more affordable housing payments for buyers. For now, the focus is on finding the right opportunities in a challenging environment.