For months, the Federal Reserve has upped its pressure on the U.S. housing market to tame runaway inflation, and a subsequent slowdown in home sales is finally having an effect on home prices, according to Fortune. Among the 896 major regional housing markets tracked by Zillow, 117 recorded falling home values between May 2022 and August 2022, and that share is expected to keep climbing.
While bubbly markets like Austin, Boise, and Denver were some of the first to see local price drops nearing and surpassing 5%, the biggest price declines are taking place in high-cost tech hubs like San Francisco and San Jose, where home prices are down 7.8% and 10.6%, respectively.
“The longer that [mortgage] rates stay elevated, our view is that housing is going to continue to feel it and have this reset mode. And the affordability resetting mechanism right now that has to happen is on [home] prices. And so there are a lot of markets across the country where we’re forecasting that home prices are going to fall double-digits,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.
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