MIAMI – Ultra-high housing prices may soon take a dip – at least in a handful of U.S. cities. CoreLogic, a financial analytics company that tracks real estate markets around the country, expects home prices to drop in several metro areas over the next year.
While home prices in the Northeast – think places like New York, New Jersey and Connecticut –continue to see substantial growth, the cities with the highest probability of a price drop are mainly in the South.
The tide appears to be turning in Florida especially. Cities like Miami, Pembroke Pines, Tallahassee, Naples and West Palm Beach have seen skyrocketing home prices. Now, some of their Sunshine State neighbors may be overdue for a drop.
The cities with the highest chance of seeing housing price cuts, according to CoreLogic, are:
1. Palm Bay-Melbourne-Titusville, Florida
2. Atlanta-Sandy Springs-Roswell, Georgia
3. Spokane-Spokane Valley, Washington
4. Deltona-Daytona Beach-Ormond Beach, Florida
5. Greenville-Anderson-Mauldin, South Carolina
In each city, CoreLogic classifies the level of risk for a price decline as “very high,” meaning real estate analysts say there’s a greater than 70% chance of a price drop by spring 2025.
Nationwide, CoreLogic’s analysts expect the growth in year-over-year home prices to slow a bit into next year. High interest rates are keeping a damper on the real estate market that was so hot just a few years ago.
The overall uptick in rates have been an unwelcome development for home shoppers in the midst of the spring homebuying season, traditionally the busiest time of the year for home sales. On average, more than one-third of all homes sold in a given year are purchased between March and June.
Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising mortgage rates and prices. Sales of new homes also slowed in April, falling 7.7% from a year earlier, as borrowing costs slowed.
New data on contract signings for U.S. homes, a bellwether for future home sales, point to potentially further slowing of home sales.
The National Association of Realtor®’s pending home sales index fell 7.7% in April from the previous month, the trade group said Thursday. April’s drop in pending home sales is the first since January.
“The impact of escalating interest rates throughout April dampened homebuying, even with more inventory in the market,” said Lawrence Yun, the NAR’s chief economist. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
The Associated Press contributed to this report.
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