These are the cities seeing the most price cuts for homes

Home sellers are dropping their sales prices as rising interest rates and inflation have eased competition in the housing market, according to a report from Redfin.

These are the top markets seeing cuts in asking price:

Boise Idaho 61.5%, Denver Colorado 55.1%, Salt Lake City Utah 51.6%.

Tacoma Washington 49.5%, Grand Rapids Michigan 49.3%, Sacramento California 48.7%. Seattle Washington 46.3%, Portland Oregon 45.7%, and Tampa Florida 44.5%.

Many of these markets saw massive price increases during the pandemic that were simply not sustainable as interest rates rose. The average rate on the 30-year fixed mortgage is now nearly twice what it was at the start of this year. That makes the cost of owning considerably higher. Boise saw its home prices soar more than 60% from pre-covid levels. Nationwide home prices are up about 39% from March 2020, when Covid-19 was declared a pandemic, according to the S&P Case-Shiller Index.

“Higher mortgage rates and a potential recession are causing prospective buyers in popular migration destinations to press the pause button” said Sheharyar Bokhari, Redfin senior economist. Competition is also cooling because there is now increasing supply on the market. Inventory hit a record low during the pandemic, but now, as homes sit longer and demand pulls back, inventory is finally rising.

Active inventory rose 28% last week compared with the same week one year ago, according to Realtor.com. Housing remains much less affordable than it was before the pandemic. For a household with a $75,000 income, only 23% of homes on the market are affordable today, down from 50% of inventory in 2018, according to Realtor.com.

Still, the road ahead points towards a promising shift, one step away from severe undersupply.

Source: https://www.cnbc.com/2022/07/14/these-are-the-10-cities-seeing-the-most-price-cuts-for-homes.html?__source=realestate%7cnews%7c&par=realestate by Diana Olick