Source: Insider —
Throughout much of the pandemic, rock-bottom mortgage rates, as well government aid meant to stimulate the US economy, spurred on an unprecedented home-buying bonanza.
Enticed by the desire for larger living spaces and the ability live virtually anywhere thanks to the rise of remote work, Americans went on a buying sprees that saw markets large and small pushed to their brinks. Intense competition led to severe bidding wars that drove home prices to record highs, often pushing out those who lacked the considerable cash needed to compete in the red-hot market.
But the US housing boom is over.
The Federal Reserve’s aggressive fight against surging inflation has resulted in several interest rate hikes that have pushed mortgage rates to levels not seen in years. As prospective buyers face borrowing costs that have doubled in the past year, activity is becoming increasingly frigid — particularly so in some cities that were homebuying hotspots during the pandemic.
“The market has shifted so rapidly,” Orphe Divounguy, a senior economist at Zillow, told Insider. “Most of the price declines will come from the affordability crisis, but also the fact that you had a lot of building activity in those markets — and the demand isn’t there anymore.”
To get a sense of where home prices are falling the most, we examined home-price data Zillow sent exclusively to Insider. After digging through the numbers for dozens of housing markets, we picked out nine US cities where home prices have rapidly cooled in recent months.
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