High Rates Cool Demand for the Former Hotspots as Prices Fall in Texas Metros and Portland, Oregon

Home-sale prices are declining year over year in Texas: Austin (-2.9%), San Antonio (-1.2%), Fort Worth (-1.2%), as well as in Portland, Oregon (-0.9%). The last time prices fell in four or more metros was in January.

Compared to a year earlier, prices rose 4.4%, rising to an all-time high during the four weeks ending June 2. However, 6.4% of U.S. home sellers cut their asking price, on average, the highest share since November 2022, indicating that national price growth could soften soon.

Additionally, the typical active listing has been on the market for 46 days. This is up 2.3% year over year, and the biggest increase in nine months, which suggests home listings are growing stale faster than they were a year ago.

According to Redfin, Some listings are growing stale because high mortgage rates and housing costs are causing would-be buyers to back off. The weekly average mortgage rate rose back above 7% last week, pushing the median U.S. monthly housing payment to a near-record-high of $2,838. (It’s worth noting that daily average rates are declining this week after U.S. job openings fell to their lowest level in more than three years.) Pending home sales fell 3.8% year over year, the biggest decline in three months, and mortgage-purchase applications declined 4% week over week. 

Inventory is losing momentum, too, which is another reason sales are falling. New listings posted one of their smallest year-over-year increases (6.9%) since February, with high mortgage rates discouraging homeowners from selling because it would mean giving up their low rate and trying to offload their home in a relatively slow market.