The tide is turning in the housing market as top metro areas see home prices fall ahead of a broader decline later this year
From Yahoo Finance: 2025-06-01 16:13:00
Home-sale prices in 11 of the 50 biggest U.S. metro areas are already falling, with the nationwide median sale price expected to decline 1% in the fourth quarter. Sellers outnumber buyers by record amounts due to high mortgage rates and increasing listings.
The housing market is shifting in favor of buyers over sellers, potentially reviving a slow home-shopping season with a decline in pending sales. Redfin predicts a flat median U.S. sale price in the third quarter and a 1% decline in the fourth quarter.
Prices in 11 of the 50 most-populous U.S. metro areas are already falling, led by cities like Oakland, Dallas, and Seattle. Redfin anticipates a nationwide downward trend in home prices later this year, with mortgage rates hovering around 7%.
More supply than demand in the housing market is causing prices to drop, with 500,000 more people selling homes than buying them. Sellers are becoming more flexible, willing to lower prices and negotiate, while homes are staying on the market longer.
While mortgage rates are expected to remain high, Redfin predicts rising wages will improve home affordability in the second half of the year. A similar forecast from Zillow anticipates a 1.9% drop in home values this year.
Citi Research warns that residential investment, a leading indicator for a recession, is set to contract this quarter due to high mortgage rates. A prolonged slump in housing activity could be detrimental to the overall economy.