Latest data from Zillow Group is revealed…
Cities that once saw some of the biggest jumps in home prices during the pandemic now have the largest share of price cuts, according to data compiled by Zillow Group.
In May, the proportion of real estate listings with lower prices increased by an average of 11.5% in all 50 of the largest US metropolitan markets tracked by the real estate company this May, up from 8.2% a year ago. The share of lower listing prices rose the fastest in real estate hotspots like Salt Lake City, Las Vegas, and Sacramento, California.
The recent leap in borrowing costs – driven by the Federal Reserve’s interest rate hikes – has discouraged buyers and started to cool markets, Bloomberg reported.
Among the same 50 metros in Zillow’s data, 32 reported a price decline in more than 10% of listings. In eight cities, the share has jumped by at least 5% over the past year.
Rate hikes and rising home prices have pushed the median mortgage application payment up by $513 in the first five months of the year, according to data compiled by the Mortgage Bankers Association, and hit $1,897 in May.
“The ongoing affordability hit of higher home prices and fast-rising mortgage rates led to a slowdown in purchase applications in May,” MBA associate vice president of housing economics Edward Seiler said in a statement last week. “Inflationary pressures and rates above 5% are both headwinds for the housing market in the coming months.”