Housing market shift: Where home prices are actually falling
Some regional housing markets in Texas, Florida, and Louisiana, are experiencing mild home price corrections.
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Some regional housing markets in states, such as Texas, Florida, and Louisiana, where inventory has risen above pre-pandemic 2019 levels, are experiencing mild home price corrections.
Why are some Sun Belt markets seeing home price corrections?
One factor is that some pockets of the Sun Belt experienced even greater home price growth during the pandemic housing boom, which stretched fundamentals too far beyond local incomes. Once pandemic-fueled migration slowed, and rates spiked, it became an issue in places like Punta Gorda and Austin.
Unlike many Sun Belt housing markets, many Northeast and Midwest markets have lower levels of homebuilding. As new supply becomes available in Southwest and Southeast markets, and builders use affordability adjustments like mortgage rate buydowns to move it, it has created a cooling effect in the resale market. The Northeast and Midwest don’t have that same level of new supply, so resale/existing homes are pretty much the only game in town.
Among the nation’s 50 largest metro area housing markets, these six markets have seen outright year-over-year home price declines over the past 12 months:
- Austin, TX: -3.5%
- New Orleans, LA: 3.2%
- San Antonio, TX: -2.5%
- Tampa, FL: -1.2%
- Jacksonville, FL: -0.4%
- Dallas, TX: -0.3%
Most tight resale markets in places like Southern California, the Northeast, and the Midwest—where active inventory for sale is still far below pre-pandemic levels—are still seeing positive year-over-year home price growth.
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