US Home Prices Fell by Most in Decade Last Month

Median U.S. home prices slid 3.3% in March from a year ago, the biggest drop since 2012, as higher mortgage rates raised the cost of buying and discouraged would-be sellers from moving, according to broker Redfin.

Home prices dropped in major metropolitan areas across the U.S. after consistently rising throughout last year, Redfin said in a report. The median price fell to $400,528 in a month in which n the average 30-year-fixed mortgage rate rose to 6.54% from 4.17% in March 2022. 

Nationwide, pending sales fell 26.6% from March 2022 to the lowest since the onset of the pandemic in April 2020. New listings fell 23.3% year-over-year in March to the lowest on record, apart from the start of the pandemic, on a seasonally adjusted basis. 

It adds up to a soggy start to the housing market this spring, typically a banner season for home sales as families with children pack up in time to settle them in new school districts by September. Slower prices even as prices drop suggest few are willing to take on a new mortgage that will almost certainly be higher than their existing one.

“This year’s spring homebuying season is lackluster,” said Redfin Chief Economist Daryl Fairweather. “There are some signs of the typical seasonal uptick—homes are selling faster than they were in the winter—but that’s partly because there are so few new listings. Normally we see homebuyers come out in throngs at this time of year, which isn’t happening.”

Prices fall in 37 metros

In March, prices fell in 37 metro areas across the U.S.

The biggest price declines were in Boise, Idaho, where prices fell 15.4% drop from a year ago. In Austin, Texasm prices sank 13.7%, followed by Sacramento (-11.9%), San Jose (-10.5%) and Oakland (-9.7%). 

In some cities, particularly those far from the East or West Coasts, prices rose. In Milwaukee, Wisconsin, they jumped 11.7%. In El Paso, Texas, prices increased 11.1%, followed by 10.7% in Omaha, Nebraska. 

March also brought the cancellation of about 55,000 home-purchase agreements, equal to about 14.8% of homes that went under contract. That's down from its October 2022 peak, but up 11.2% from last March.