U.S. housing prices are finally starting to come down, but not nearly enough for many aspiring buyers struggling to break into the market.
The median selling price of a previously owned home clocked in at $375,700 in March. That’s 0.9% below its year-ago level, marking the largest decline since 2012, data from the National Association of Realtors showed Thursday.
But the drop follows a rapid run-up in prices starting in 2020, when borrowing costs were historically low and Americans frenetically moved to suburban areas during the pandemic.
Prices peaked in the middle of last year when mortgage rates started to jump, but they’re still far above pre-pandemic levels due to limited supply. There were 980,000 homes for sale last month, hovering near a record low in data back to 1999, Thursday’s report showed.
That’s leading to multiple offers on especially entry-level homes, NAR Chief Economist Lawrence Yun said on a call with reporters. It’s also increasingly pushing buyers to new construction.
On a monthly basis, prices actually increased — the first back-to-back gains since the middle of last year — across both single- and multi-family homes.
“The overall trend for both categories, however, still points to a cooling market, with prices having peaked,” Barclays Plc analyst Colin Johanson said in a note.
Prices in the West fell 7.5% from March 2022, while they ticked up in other regions.