Home prices are dropping in half of the nation’s largest markets, according to new data, raising concerns of a looming downturn in the U.S. housing sector.
A new report from Zillow shows that sellers across the country are cutting prices at record levels, reflecting the challenges of high mortgage rates, inflation and economic uncertainty.
27.4 percent of all listings had a price cut in July, the highest level since Zillow began tracking the metric in 2018.
The pace of reductions helped push year-over-year home values lower in 25 of the 50 largest U.S. metropolitan areas.
The majority of these price drops are occurring in the South and the West, regions that saw rapid growth during the pandemic-era housing boom.
Florida and Texas have emerged as leading examples of markets shifting from expansion to correction.
Tampa home prices dropped 6.2 percent, Austin declined 6 percent, Miami fell 4.6 percent, Orlando decreased 4.3 percent and Dallas dropped 3.9 percent, according to Zillow.
“Metros where price corrections are steepest are among those with the largest increase in inventory compared to before the pandemic,” said Kara Ng, senior economist at Zillow.
Builders in southern and western markets responded quickly when pandemic demand surged, largely