The headline is promising; Home Prices fell more than 20% in seven of the ten hottest markets last month. That means instead of bidding wars in Phoenix, Atlanta, Tampa, Sacramento, San Antonio, and Cape Coral, Florida, you might be able to actually find a bargain.
However, there’s a rub. Mortgage rates are up, which means if you are in the market to buy a home this summer, it will cost a lot more to borrow money on a house that might cost a lot less than it did a year ago.
Here’s what Redfin chief economist Daryl Fairweather said in a Fox report.
“When mortgage rates were at or below 3%, both local and out-of-town homebuyers were more willing and able to tolerate high prices, but at 5%, many are now priced out. A home’s price is driven by the balance of supply and demand, and when demand drops off and supply increases like it is now, rapid price increases evaporate quickly.”
In Boise, Idaho, 41% of the homes for sale saw price decreases, according to the Fox report. The housing market had been red hot, especially in big urban cities where people have been leaving in droves since the pandemic. According to Redfin, the national rate of price decrease is at its highest level in almost three years.
Large cities that have experienced the most significant migrations are Tampa, Phoenix, and Atlanta, but because of that, these cities are experiencing some of the highest increases in inflation.
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