Tipping Point? Some U.S. Homes Cheaper YtoY
25% of Austin and Seattle listings cost buyers less monthly now than they did one year ago as falling prices counteract interest rates. But that’s less true in Fla.
SEATTLE – A monthly mortgage payment is based on a home’s selling price and the loan interest rate a buyer can secure. For the past year, higher interest rates have made homes less affordable – but as home prices ease in some cities, the lower selling price is starting to outweigh the burden of higher interest rates.
In two U.S. cities – Seattle and Austin, Texas – 1 in 4 buyers (25%) secured a lower monthly mortgage payment than they would have one year ago, according to a report from Redfin, with that pattern repeated in cities across the U.S., though at a lower rate than the nationwide share of 7.1%.
It’s also true in Florida, but the percentage of buyers getting a lower monthly payment rate year-to-year is notably lower.
In fact, Orlando had the smallest percentage of buyers (1.2%) capable of paying less this year than last. Other cities at the low-end of the price-saving spectrum were Des Moines, Iowa (1.2%), Richmond, Va. (1.4%), Lakeland (1.8%) and Raleigh, N.C. (1.9%).
Share of Florida listings with lower monthly payments
- Cape Coral: 14.9% – home prices up 3.9% year-to-year
- West Palm Beach: 11.2% – home prices up 8.8% year-to-year
- Fort Lauderdale: 3.3% – home prices up 8.1% year-to-year
- Tampa: 3.3% – home prices up 0.2% year-to-year
- Jacksonville: 2.6% – home prices down 3.1% year-to-year
- Miami: 2.2% – home prices up 7.4% year-to-year
- Lakeland: 1.8% – home prices up 1.3% year-to-year
- Orlando: 1.2% – home prices up 3.2% year-to-year
After Austin, Texas, the top cities for lower year-to-year monthly prices are Seattle at 23.6%, San Francisco (18.8%), New York (18.3%) and Pittsburgh (15.6%).
The housing market started to slow last year in response to rising mortgage rates, which brought down home prices in some parts of the country. While monthly payments on many for-sale homes remain higher than they would’ve been a year ago due to elevated mortgage rates, an increasing percentage of homes have become more affordable because their value dropped enough to offset the higher interest-rate cost.
“The decline in home prices is good news for house hunters, but the irony is that it’s also limiting their options because it’s making a lot of homeowners hesitant to sell,” says Redfin Economics Research Lead Chen Zhao. “Elevated rates and declining prices are prompting many sellers to stay put, which is fueling a housing shortage that’s keeping prices from falling further.”
Redfin has the full report posted in its website.
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