Home prices have begun to cool in several U.S. cities, especially in regions that saw major surges during the pandemic-era housing boom. New data reveals that places like Austin, Texas; Boise, Idaho; and Phoenix, Arizona are experiencing some of the steepest year-over-year declines in median home sale prices. These markets had previously faced rapid price increases due to remote work trends and high demand, but they are now seeing corrections as interest rates rise and buyer demand tapers off.
According to Redfin, the biggest price drops from their respective peaks occurred in cities where homes had become significantly overvalued during the height of the COVID-19 housing frenzy. With affordability hitting record lows due to elevated mortgage rates, buyers have backed away, forcing sellers to drop prices or pull listings entirely. Experts suggest that while a nationwide crash is unlikely, regional markets that overheated the most are now adjusting the fastest.
Read more about Arizona home prices.