While house prices remain high across the country and the “correction” of the market predicted by experts seems to have already reached an end, there are four cities where the cost of homes have dropped by over 1 percent. This is according to data from the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.
Home prices skyrocketed across the U.S. during the pandemic, with relatively low mortgage rates and limited supply pushing aspiring homebuyers toward costly bidding wars. In June 2022, the price of a single family home in the country reached an average price of $416,000—an all-time high in U.S. history.
Since then, prices have started to drop as many homebuyers were squeezed out of the market entirely, and demand temporarily slowed down. But, as inventory remains historically low, despite new construction projects finally kicking off and people still wanting—and needing—to buy a home, prices have recently jumped back up.
As of August 31, the latest data available on Zillow, the average value of a U.S. home was $349,770. This is 0.4 percent up on the average one year ago.
However, certain cities have benefited from a significant drop in prices since last summer—especially those that were among the most-overvalued cities in the entire national market.
Data from Freddie Mac shows that, in four cities—Austin, Texas; Phoenix, Arizona; New Orleans, Louisiana; and San Antonio, Texas—prices have dropped over 1 percent in the past year.
Specifically, home prices in Austin have dropped by 7.92 percent year on year as of August, while, in Phoenix, they slumped by 1.65 percent. New Orleans saw home prices come down by 3.49 percent between August 2022 and August 2023, while San Antonio experienced a drop by 1.02 percent.
Some of these cities experienced the highest home appreciation in recent years during the pandemic, as they attracted a big movement of people wishing to move there, and are still among the most-overvalued metros in the U.S.
Between January 2020 and June 2022, home prices in Austin, for example, surged by 78 percent, while home prices in Phoenix climbed by 70 percent.
In three of these cities, prices continue falling against the national trend that has seen the country’s average home prices go up since August. In Austin, home prices were down 1.21 percent in August, compared to a month before; while, in New Orleans, they were down by 0.84 percent and in San Antonio by 0.65 percent.
Only in Phoenix, prices jumped back up by 0.07 percent between July and August, and they were up 5.13 percent year-to-date, or since the beginning of the year.
As of August 31, according to Zillow, the average price of a home in Austin was $554,561; in Phoenix, it was $415,258; in New Orleans, it was $263,349; and, in San Antonio, it was $263,040.