Despite High Borrowing Costs, Some US Cities See Home Price Declines
Despite record-high borrowing costs, home prices in major US cities continued to rise in 2024, except for a few major cities in Texas and Florida, which saw prices decline. According to listings data from online broker Redfin, only four of the 50 largest metros recorded year-over-year price declines by November 2024.
The cities with the largest price drops are:
* Austin, Texas: -3.7%
* Tampa, Florida: -3.5%
* San Antonio, Texas: -3.0%
* Fort Lauderdale, Florida: -1.6%
Austin, Texas, saw the steepest drop, with home prices falling from a peak of $667,000 in 2022 to $548,500 in 2024. While still higher than the national median, the decline marks a significant shift from the city’s pandemic-era growth. The drop in prices can be attributed to a slowdown in migration and an increase in new homes entering the market, leading to slower price growth in cities like Austin and Fort Lauderdale.
The rise of “stale inventory” – homes sitting on the market for over 60 days – is also affecting prices, with over 60% of listings in Austin, Fort Lauderdale, and San Antonio remaining unsold for two months or longer. Florida’s housing market faces additional challenges, including natural disasters, rising construction costs, and surging HOA fees, making homes increasingly unaffordable for buyers.
In contrast, much of the country is expected to see home prices rise, with Redfin senior economist Sheharyar Bokhari predicting a steady price increase in 2025. Elevated mortgage rates are expected to cause homeowners to hold onto their homes, leading to a relatively low number of homes on the market and driving prices up.
