U.S. Housing Market Softens: 49 of 50 Metros Weaker, Phoenix and Washington D.C. Highlighted
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The U.S. housing market is experiencing a significant softening this spring, with 49 of the nation's 50 largest metro areas showing weaker year-over-year home price shifts compared to last year. This trend indicates a shift in the supply-demand equilibrium favoring homebuyers, as reported by Residential Club.
In Phoenix, the softening is particularly pronounced. Home prices have declined by 2.9% year-over-year, and half of the homes on the market have undergone price cuts. The median single-family home sold price in Phoenix fell by 4% last month, a time when prices typically increase. Additionally, Phoenix is seeing its highest supply of homes for sale since 2011, with the median sold price for all home types dropping by $10,000 in April. This trend is more pronounced in the Sun Belt, particularly in Gulf housing markets, with significant impacts seen in Texas, notably Austin and San Antonio, and in Florida.
Washington D.C. also reflects this trend with a 25.1% year-over-year surge in homes for sale, reaching the highest level since 2022. Conversely, the region's single-family detached housing prices have reached historic highs, showcasing a mixed market dynamic.
The spring homebuying season across the U.S. has had its weakest start in five years, with the number of signed contracts being the lowest since the Covid lockdown in 2020. Deals were down 3% from last April, and annual median price growth was just 1.4%, compared with the almost 6% gain recorded in April 2024. This slowdown is attributed to high mortgage rates and economic uncertainty, impacting buyer and seller urgency. In specific markets, the Newark metropolitan area saw a 13% year-over-year price increase, Cleveland an almost 12% jump, and Milwaukee a 9.7% rise, while Miami experienced a 23% drop in signed contracts.
