The cities where house prices are set to DROP - and most are in the south
- A new analysis predicts declining prices in five metropolitan areas in the U.S.
- This comes amid skyrocketing mortgage rates and a national housing shortage
- READ MORE: The one U.S. state defying national real estate trends, revealed
Sky-high house prices are anticipated to drop in several metropolitan areas across the southern United States.
The cost of real estate only continues to inch upwards in states like New York and Connecticut. However, a new report from financial analytics company CoreLogic indicates that several metro areas, mostly in the South, are likely to see a decline.
Despite skyrocketing home prices in cities like Miami and West Palm beach, two metros in the Sunshine State are expected to see a drop: the Palm Bay-Melbourne-Titusville region and the Deltona-Daytona Beach-Ormond Beach region.
In each city, CoreLogic analysists predict over a 70 percent chance of a price drop by spring 2025, classifying the risk level as 'very high.'
This goes for other metropolitan areas as well. Just over the border, Georgia's Atlanta-Sandy Springs-Roswell region is expected to see a drop, as well as the Greenville-Anderson-Mauldin metro in nearby South Carolina.
Five metropolitan areas in the United States, including the Palm Bay-Melbourne-Titusville region in Florida, are anticipated to see a drop in home prices by spring 2025 (pictured: the city of Melbourne, Florida)
Four of those regions are located in the South, including the Greenville-Anderson-Maudlin metro in South Carolina (pictured: the city of Greenville)
These turning tides aren't limited to the South, either; on the opposite coast, Spokane and the greater Spokane Valley in Washington are due for a price decrease.
Nationwide, CoreLogic’s analysts expect the growth in year-over-year home prices to slow a bit into 2025.
High interest rates have taken an undeniable toll on the real estate market, and a report from the National Association of Realtors found that sales throughout the U.S. dropped 1.9 percent from April year over year.
The median sold price in April was $407,600, an increase of 5.65 percent year over year and up 3.58 percent from a month prior.
The South lingered slightly behind these trends as median home prices rose to $366,200, up 3.7 from 2023.
The ongoing housing shortage, which has been deemed a 'crisis' by some analysts, poses another problem for prospective home buyers.
This sparse inventory is compounded by factors including lingering effects of the Great Recession as well as skyrocketing mortgage rates, which reached their highest point in more than two decades late last year
Georgia's Atlanta-Sandy Springs-Roswell metropolitan area is among those with a 70 percent likelihood to see a decline in home prices by next year (pictured: the city of Atlanta)
The trend is not limited to the south, either; Washington's Spokane Valley (pictured) is also included in the predictions
The sweeping uptick in home prices presented a challenge for home shoppers during what is historically the busiest time of year. More than one-third of all homes sold in a given year are bought between March and June.
The National Association of Realtor’s pending home sales index fell 7.7 percent in April from the previous month, the first drop since January.
'The impact of escalating interest rates throughout April dampened homebuying, even with more inventory in the market,' said Lawrence Yun, the group's chief economist.
However, Yun continued, 'the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.'
Despite escalating home prices and mortgage rates, hopeful first-time buyers appear to feel optimistic about the 2024 market.
Nearly three in four Americans who plan to buy their first home have faith in the housing market and their personal finances, according to TD Bank’s First-Time Homebuyer Pulse survey.
