The residential housing market in the U.S. has changed radically in a few months. Home prices were skyrocketing earlier this year. Interest rates, at 3% for 30-year fixed loans, were at multi-decade highs. Today, home prices in many metros have started to fall. Mortgage rates are just shy of 7%. The situation has become so difficult that people have started to break the purchase contracts they have agreed to. The city where this activity is highest is San Antonio. Several other cities join it as measured by this yardstick across Texas and Florida, according to a new study.
Home prices jumped 20% yearly in most large cities from early 2021 until a few months ago. Realtor.com just released a new study of the housing market. Titled “Home Sales, Listings Plunge Over 20% in September—Most on Record Aside From Pandemic Start” it focuses on September data. The drop in listings even eclipses figures for the housing Armageddon in 2008/2009 that triggered a record number of mortgage defaults and foreclosures.
Home price increases have stopped nationwide. They remain very close to record levels. The median price of a home for sale in September was $403,797. This dropped .5% from the previous quarter but rose 7.6% from a year ago. New home listings in September dropped 22.4% to 503,156. The number of homes sold for the listing prices plunged to 32%. A year ago, the figure was closer to half of all sales.
Broken contracts are a sign of buyer desperation. The figure was 17% nationwide in September.
San Antonio has been one of the fastest-growing large metros in America in terms of population. The four big cities in Texas to post population growth from 2020 to 2021. The others were Austin, Houston, and Dallas. The numbers were similar in most large Florida cities and in Phoenix.
Of the pending home sales in September, 25.3% were broken in San Antonio. The figure was above 20% in Houston, Dallas, Tampa, Miami, Jacksonville, and Phoenix.
One theory about these cities is that their surges in population drove home demand rapidly. Prices rose along with that. This made each among the most expensive housing markets in the country. As mortgage rates rose, homes in these cities started to become unaffordable.
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