Housing Slump Expands As Home Price Declines Most Widespread in 11 Years

May 31, 2023

The slump in US home prices is becoming more widespread, with the share of markets seeing declines at the highest in over a decade.

According to a National Association of Realtors report Tuesday, 31% of US housing markets experienced declines. That's the highest in 11 years and up from 11% of markets that saw price declines in the fourth quarter.

The beginning of 2023 saw 30-year mortgage rates fluctuate between 6.1% and 6.7%, while the inventory shortage may also have played a role in pricing.

"Generally speaking, home prices are lower in expensive markets and higher in affordable markets, implying greater mortgage rate sensitivity for high-priced homes," said NAR Chief Economist Lawrence Yun.

But price declines could be short lived, he added, as inventory remains 40% below pre-COVID levels. Multiple offers are also returning, especially on affordable homes, Yun said.

Meanwhile, 69% of housing markets saw home prices rise in the first quarter, down from 89% in the fourth quarter.

Overall, the national median for a single-family home decreased by 0.2%, after having jumped 4% in the fourth quarter.