For more than four years, home sellers have had the upper hand in the housing market. Now, buyers may finally be catching a break.

A new report from Realtor.com shows that the median list price in September was down in more than half of the 50 largest metros, with some markets seeing declines of up to 12% year-over-year. This is in stark contrast to just a few months ago, when sales prices hit an all-time high. With home prices moderating, alongside lower mortgage rates and increasing inventory, the market may be turning in buyers favor.

Moreover, many housing markets seeing lower prices also happen to be cities considered desirable during the pandemic, either because they had more affordable housing, more favorable tax policies or a better climate. Florida, for instance, has four cities on the list of places getting cheaper, including Miami and Tampa — although the impact of Hurricanes Helene and Milton on home prices in the latter city remains to be seen. Other pandemic boomtowns on the list include Austin, Texas, and Nashville, Tennessee.

Housing affordability may be improving

Homebuyers have coped with a challenging housing market since 2020 — though for different reasons. The first two years of the pandemic brought record-low mortgage rates, allowing buyers to buy bigger, more expensive homes as borrowing costs tanked. But the ensuing buying boom caused home prices to soar as would-be buyers competed against each other and engaged in bidding wars.

Starting in 2022, however, the market started to flip. Mortgage rates began quickly climbing, nearing 8% last October. With increased costs in both prices and financing, the lack of housing affordability hit a record low, pushing out many buyers and leading to a sluggish market. According to the National Association of Realtors, the number of sales last year was 4.09 million homes — their lowest level in nearly 30 years.

Now, the market appears to be going through another shift. Mortgage rates, which had been hovering over 7% for most of the year, are now in the low 6% range. Those lower borrowing costs have increased affordability for many buyers with tight monthly budgets.

Home sellers are also being more flexible when negotiating a sale. Realizing that homes are sitting on the market longer and that they can no longer expect multiple offers to push prices significantly higher, homeowners are listing at more reasonable starting prices and are more willing to compromise. According to listing site Zillow, 22.4% of for-sale homes in April had price cuts, the highest percentage in six years.

As a result of all these changes, buying conditions have improved, although they are nowhere near the affordability level of the pre-pandemic years. However, easing home prices and mortgage rates is good news for homebuyers waiting for their dream home.

10 markets with the biggest drops in home prices

Some of the more popular cities for homebuyers looking to relocate are seeing the biggest changes in home prices. Here are the metros with the biggest year-over-year price declines:

Miami, Florida — 12.4%
Cincinnati, Ohio — 9.5%
San Francisco, California — 8.9%
Kansas City, Missouri — 8.4%
Austin, Texas — 6.6%
Jacksonville, Florida — 6.1%
Denver, Colorado — 6%
Orlando, Florida — 5.6%
Tampa, Florida — 5.5%
Nashville, Tennessee — 5.4%

More from money:

8 Best Mortgage Lenders of 2024

What HomebuyersNeed to Know About the New Rules for Paying Real Estate Agents

How Baby Boomers Became the ‘Wealthiest Generation That Ever Lived’

According to a report from The Money.com, home sellers have had the upper hand in the housing market for over four years. However, buyers may finally be catching a break as the median list price in September was down in more than half of the 50 largest metros. This is a significant change from just a few months ago when sales prices hit an all-time high. The market may be turning in buyers’ favor due to lower home prices, lower mortgage rates, and increasing inventory.

The report also highlights that many desirable cities during the pandemic, such as Miami, Tampa, Austin, and Nashville, are seeing lower home prices. This could be due to more affordable housing, favorable tax policies, or a better climate. However, the impact of recent hurricanes on home prices in some of these cities remains to be seen.

The housing market has been challenging for buyers since 2020, with record-low mortgage rates allowing them to purchase bigger and more expensive homes. However, this led to a buying boom and soaring home prices. In 2022, the market started to shift as mortgage rates increased, making housing affordability hit a record low. This resulted in a sluggish market with the lowest number of home sales in nearly 30 years.

Now, the market appears to be going through another shift as mortgage rates have decreased to the low 6% range. This has increased affordability for buyers with tight budgets. Home sellers are also becoming more flexible in negotiations, listing homes at more reasonable prices and being more willing to compromise. According to Zillow, 22.4% of for-sale homes in April had price cuts, the highest percentage in six years.

Overall, buying conditions have improved, although they are still not at the level of pre-pandemic affordability. However, with easing home prices and more flexible sellers, the market may be turning in favor of buyers. 

Source:Read More