The median U.S. home price sank by 3.1 percent in May in the largest year-over-year drop since December 2011, the National Association of Realtors (NAR) reported.
The median price stood at $396,100 on 31 May.
Last month marked the fourth consecutive month of declining prices, which has not happened since 2012, according to the NAR.
Prices fell in the western U.S., where many locales saw prices skyrocket during the COVID War. Prices in the East rose slightly, regaining some of what they lost over the past three years.
Prices fell the most in Austin, TX, down 15.1 percent. They dropped 14.3 percent in Boise, ID, and 11.2 percent in Oakland, CA. Prices gained 10 percent in Hartford, CT, 9.7 percent in Rochester, NY, and 9.3 percent in Cincinnati.
Sales of existing homes, which account for most of the housing market, edged up 0.2 percent last month from April to 4.3 million but were 20.4 percent fewer than a year previous.
The number of existing homes sold in the West rose 2.6 percent and 1.5 percent in the South. Sales declined in the Northeast and Midwest.
Sales overall have fallen by about a third since 2022 began, the NAR said.
Prices are still elevated compared to pre-COVID levels, shutting out many potential modest- and moderate-income buyers. Also, many present owners with low-rate mortgages are reluctant to give them up.
Mortgage interest rates have doubled in the past 18 months, also locking out many potential buyers. The average national rate for a fixed-rate, 30-year loan was 6.67 percent on 22 June, according to the Federal Home Loan Mortgage Corp.
The average home sold in May was on the market for 18 days and the number of newly listed homes was off 23 percent from a year earlier, Realtor.com said.
First-time home buyers made up 28 percent of the market in May and a quarter of last month’s home sales were all-cash deals, NAR noted.
TREND FORECAST: Prices will continue to edge down but the combination of relatively few houses for sale and high demand for them will keep prices above historical norms. The most desirable homes will still see bidding wars.
High interest rates, now due to move higher next month under the U.S. Federal Reserve, will cull the market further, leaving a smaller number of buyers. That factor will push prices down but not greatly.
Today, the S&P CoreLogic Case-Shiller national home price index reported that home prices in April were still down 0.2 percent compared with April 2022. And as we had long forecast, they would slump but not dive, the index also showed the prices were 0.5 percent higher month to month, after seasonal adjustments and prices are only 2.4 percent below their June 2022 peak.
Prices will not fall dramatically until the U.S. enters a prolonged, full-blown depression.