Source: Florida Realtors —
But U.S. metros aren’t all the same. Of the top 10 states for price declines, 8 of 10 are in the West, as Miami, Tampa and Atlanta show the biggest price jumps.
NEW CASTLE, Ind. – Home values in some states began to fall at the end of last year and may continue to drop, according to the latest data from the S&P CoreLogic Case-Shiller U.S. National Home Prices NSA Index, the leading measure of U.S. home prices. Nationally, prices decreased 0.6% from June to November 2022.
But despite a growing trend of falling prices the last few months, house prices are still up 7.7% year over year.
Insurify has rounded up the top 10 states with the fastest-falling home prices. To identify these states, Insurify’s data scientists analyzed Zillow’s seasonally adjusted housing data to see where median home values have fallen the most over the second half of 2022.
Overall, home prices in the Western United States fell in the latter half of 2022. Nevada led the charge, followed by Arizona, California, and Utah. Of the 10 states featured on our list, eight are in the West. Home prices in Nevada fell the most, with a 4.8% decline in prices between June and November 2022. Home prices in Massachusetts fell the least, with just a 0.1% drop in prices in the latter half of last year.
While housing prices in the West are falling the fastest, markets in the South and Southeast continue to be strong, with Miami, Tampa, and Atlanta showing the biggest jumps in prices.
The Federal Reserve announced a quarter-point increase in February 2023 and signaled further rate increases over the course of the year. Increases in interest rates typically lead to falling home prices, so you can expect home prices to drop even further as the year progresses.
What does this mean?
Prospective homebuyers can expect cheaper prices, but as the Fed continues to implement interest rate hikes, they can also expect higher mortgage rates and higher home insurance rates. Still, it all comes down to specifics – you might be able to afford the higher mortgage and insurance rates if you find a good deal on a house.
But a good deal might be hard to find, according to Jorge DosSantos, branch manager at a Total Mortgage in the New England area.
“Rate increases kicked a lot of buyers out of qualifying, and some sellers are simply waiting because they don’t want to give up the 3% rate they have currently to go into a 6% rate,” DosSantos said. “But on the other hand, we have some markets still increasing because of inventory! Not enough houses on the market creates bidding wars.”
All that to say, higher inflation rates, higher interest rates, and higher home insurance rates ahead in 2023 may prove to be hurdles for prospective homebuyers, even with falling home prices.
States where home prices are falling the fastest
To identify the top states where home prices are falling the fastest, Insurify’s data scientists analyzed Zillow’s seasonally adjusted housing data to see where median home values have fallen the most over the second half of 2022.