After two years of consistent growth, U.S. home values fell 0.1% from June to July, the first notable decline since 2012, according to Zillow. The typical U.S. home value now averages $357,107, but home values measured by the raw Zillow Home Value Index fell from June to July in 30 of the 50 largest metro areas, and more could soon follow as the housing market rebalances.
San Jose saw the largest monthly home value decline at -4.5%, followed by San Francisco (-2.8%), Phoenix (-2.8%), and Austin (-2.7%). As buyers slow their home searches and sellers drop their list prices, those still actively hunting for homes have a newfound upperhand in a growing number of metros nationwide.
The nation’s typical home value is still up 16% year over year and 44.5% since July 2019, despite softer pricing in more recent months. Incorporate higher mortgage rates, and the typical mortgage payment has risen by more than 60% in just one year. While high prices plus higher mortgage rates have pushed some buyers from the market for now, those shoppers who are able to proceed suddenly face a much less competitive market, offering them more time to conduct their search and more options to consider.
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