The drop is the result of a marked increase in interest rates and constant quality home price appreciation, also called HPA, since January 2020.
A chart from AEI first published by Fortune shows that more than 50 of the 60 largest metropolitan areas in the country have seen home prices drop, several by 5%-10%. Home prices in Seattle — where median prices jumped 18% from approximately $710,000 in April 2021 to $840,000 in April 2022 — fell 8.2%. The area’s housing market is in flux for the first time in nearly a decade.
Where Else Are Home Price Decreases Expected? Ed Pinto, AEI’s Housing Center director, predicts that the trend will continue to other markets, particularly in the Northeast. As you can see in this chart from Point2, several of these cities are those in which home prices have dropped significantly.
Can we do math? A $400k house was run up to $700k during the madness is now down to $679k. The $560k 80% mortgage was $2256 but now, saving $21k off the price it’s $3705 a month. Not exactly a benefit, is it?