During the peak of the housing boom, home prices surged in practically every corner of the country. Now, the housing market is split down the middle – with prices in most Western states dropping while those in many parts of the Midwest, South and Northeast are still on the rise. (Related: Existing home prices in the US fall for the first time in 11 years.)
California and the Mountain West saw some of the biggest drops in housing prices. San Francisco alone posted a 14.5 percent drop in median single-family existing-home sale prices compared to a year earlier. This is followed by median prices in San Jose, which dropped by 13.7 percent.
Austin, Texas and Boise, Idaho, which experienced similar housing booms during the Wuhan coronavirus (COVID-19) pandemic, saw housing prices decline by more than 10 percent each.
This is all according to new research released by the National Association of Realtors (NAR), which found that much of the decline in housing prices came from the country's largest metro areas, fueled by a mass exodus of people running from Democrat-controlled, crime-ridden and high-tax cities.
"Generally speaking, home prices are lower in expensive markets and higher in affordable markets, implying greater mortgage rate sensitivity for high-priced homes," said NAR Chief Economist Lawrence Yun.
The NAR added that the decline was posted in 31 percent of the country's 221 metro areas tracked by NAR, and that this was the highest percentage decline posted in 11 years. The remaining approximately 69 percent of metro markets saw single-family existing-home sales climb, with about one in 14 markets – or approximately seven percent – posting double-digit price increases.
Along with the decline in housing prices, the number of homes being sold nationwide has fallen over the past year, as Federal Reserve-induced higher mortgage rates have weighed on home buying demand, and the supply of available homes is also very limited. But this induced price increase seems to be abating, albeit slightly.
In the first quarter, mortgage rates dipped slightly compared to the fourth quarter of 2022, when mortgage rates surged to over seven percent. The monthly mortgage for the first quarter for a typical existing single-family home with a 20 percent down payment was $1,859. This represents a 5.5 percent decrease from the average of $1,967 monthly mortgage in the previous quarter. But this is also still a massive jump of 33.1 percent – or an additional $462 – from a year ago.
Families in the first quarter also typically spent around 24.5 percent of their monthly income on mortgage payments, down slightly from the 26.2 percent of monthly income in the previous quarter, but still higher than the 19.5 percent during the first quarter of 2022.
This has made single-family existing homes attractive for some first-time home buyers, including Kris Vierhaus and Travis Carter, who bought a three-bedroom in San Mateo, California, in San Francisco's South Bay region. They first viewed this house back in December but thought it was overpriced. They returned in February, when the house was still on the market, put in an offer and bought it for about four percent below the listing price.
"By the time we closed, it was confirmed that people were going to get asking [price] or below," said Vierhaus. "The aggressive offers, or the fighting over things, was just not happening anymore."
Learn more about the collapse of the American economy at MarketCrash.news.
Watch this clip from Fox News discussing how President Joe Biden's administration is going to punish homebuyers with good credit.