The typical U.S. home value edged lower by 0.1 percent from August to September, according to the latest Zillow Home Value Index (ZHVI) data, marking the first month-over-month decline since February.
Despite the apparent good news for aspiring homebuyers, who have been facing skyrocketing prices for the past few years, homes were on average still 2.1 percent more expensive than in September 2022.
Fewer homes around the country have been selling above their list price—37.7 percent in August, compared to July’s 40.2 percent—and there were slightly more homes on the market, with the pool of inventory (the number of listings active at any time during the month) expanding by 0.2 percent in September. The number of new listings was down, however, by 9.3 percent compared to this time last year.
The residents of some cities have more reasons than others to be concerned over the latest Zillow index, with a total of 32 major metro areas reporting a monthly drop in home prices.
The largest monthly declines in house prices from August to September were reported in Austin, Texas (-1.4 percent), New Orleans (-1.4 percent), San Antonio (-0.9 percent), Portland (-0.6 percent), and Minneapolis (-0.6 percent).
Some of those cities also reported the biggest drops in prices year-on-year compared to 2022, with Austin recording a drop of 10 percent, New Orleans a decline of 8.8 percent, and San Antonio a slide of 2.5 percent.
What these cities have in common is that they used to be—and for some, they still are—among the most overheated markets in the country, having experienced the highest home-price appreciation in recent years during the pandemic, when many decided to move there because of the quality of life, or the weather, as in the case with Austin and San Antonio.
Between January 2020 and June 2022, home prices in Austin, for example, surged by 78 percent.
Residents of other cities have not experienced the same drop in home prices. According to Zillow, home values climbed on a monthly basis in 14 of the 50 largest metro areas in September. The cities that experienced the biggest increases in home prices were San Diego (0.8 percent), Miami (0.5 percent), Hartford (0.3 percent), Los Angeles (0.3 percent) and San Jose (0.3 percent).
A correction of the housing market predicted by experts in late summer 2022 materialized earlier this year and may still be ongoing, despite the fact that lingering low inventory and high demand have softened its impact on the market.
Newsweek contacted Zillow for comment by email on Monday.