Published by REALTOR.com | March 30, 2023
In March, real estate listing prices came in nationwide at a median of $424,000, down from June’s all-time record high of $449,000.
After a few years of flying high, home prices are finally coming back down to earth with a thud. In fact, the prospect of an outright price drop is looming on the horizon, according to a new Realtor.com report.
In March, real estate listing prices came in nationwide at a median of $424,000, down from June’s all-time record high of $449,000.
And while this March’s prices are 6.3% higher than in March 2022, that price growth is tapering off, marking “the lowest rate of growth since June 2020, in the early months of the COVID-19 pandemic,” notes Danielle Hale, Realtor.com® chief economist, in her analysis.
She even predicts that, “at this rate of slowing, list prices are likely to decline, relative to the previous year, by summertime.”
Given that home prices have been running hard and high throughout much of the pandemic, why are they showing signs of losing steam right in the buildup to the busy spring homebuying season?
One clear culprit is mortgage rates, which have more than doubled over the past year—from under 3% to well above 6% for a fixed-rate 30-year loan. Played out in monthly mortgage payments, financing 80% of a typical home today costs an average of $611 (or 39.3%) more, compared to just last year.
This has put a serious crimp in what homebuyers can afford—and, in turn, is forcing sellers to lower their expectations and asking prices. As Hale puts it, home sellers have “gradually adjusted to softer market conditions.”
Many sellers budged, albeit grudgingly, disappointed that they missed the market’s peak.
