Back in July, I wrote about how 68 of America's 300 largest housing markets were seeing home prices fall compared to the previous year. Two months later, only 54 markets have price declines. For context, a year ago prices were falling in 109 markets.

So the wave of price drops that started in 2023 is clearly losing steam. But mortgage rates just climbed back above 7%, and that could change things again this fall. Today we're covering where prices are falling, where Utah fits in, and what it means for your next move.

Nationally, home prices are up 1.3% over the past year. That's still a fairly soft market, but it's a little stronger than a year ago, when prices were basically flat.

For perspective, in a normal year prior to the pandemic, only 2 to 12 of major housing markets would normally have falling prices. So we're not back to a normal yet national market yet, but we're moving in the right direction. That being said, real estate is very much fragmented, and specific to your area. The chart below shows all markets that have had prices fall over the past year. You’ll notice Utah is not on this list, which is good news for home owners and sellers. Later on we’ll talk about what’s happening specifically in Utah.

Most of the markets with falling prices are in the Sun Belt and Mountain West region (excluding Utah and Idaho). These also tend to be markets where prices ran up fastest during the pandemic, often faster than local paychecks could keep up. A lot of new construction has kept inventory levels high and added pressure since builders often cut prices or offer large incentives to keep homes selling.

That being said, you’ll see a massive gap between the strongest and weakest markets right now. For example, home prices in Hartford, Connecticut are now 29% above their 2022 peak. In Austin, Texas, prices are still 27.6% below it’s peak.

Over the past week, the average 30-year mortgage rate has been coming in between 7.25 and 7.5%, which is the highest it’s been since November of 2023. So the big question now is whether higher rates will start another wave of price softening or not.

The biggest thing to watch moving forward is inventory levels and how quickly existing homes sell. When more homes are for sale than buyers can absorb, prices cool off.

Utah is in an interesting spot. We now have more homes for sale across the state than any time since before 2016 (my data source only go back to 2016, but you would likely have to go back to 2007 to see higher inventory levels than what we have now).

That means buyers here have more homes to choose from than they have at any other point over the past decade.

However, Utah is not among the housing markets with price declines over the past year. At least not yet. In fact, home prices have increased 1.5% over the past year in Utah. Again, nothing crazy, but not outright declining.

The median home sales price in Utah peaked during the 2nd quarter of 2022 at $532K. The median sales price in Utah as of this month is $523K. So prices are still below the 2022 peak, but we’ve slowly been working our way back up the past several years. You’ll also notice the chart above shows the last time prices declined was in 2023, when we had mortgage rates above 7.5% and less inventory than we have now.

That being said, the amount of buyer demand we’re seeing is higher now than back in 2023, so I’ll be watching this closely.

More homes for sale and slower price growth means you have more room to negotiate than you did a couple of years ago. If rates stay high into the fall, that leverage could grow. Fall is usually a slower season and higher rates thin out the competition.

That also doesn't mean you should wait for rates to drop. Frankly, there’s a lot of uncertainty on what rates are going to do from here. But what it does mean is you should be ready to ask for more when negotiating with sellers and get creative. Seller-paid closing costs, rate buy downs, price reductions, and other incentives are all strategies I’m using with my buyers right now to get really good deals.

Anecdotally, I’ve seen some of the best deals I’ve seen in a really long time this year. Frankly, I’ve sold single family homes this year for the price of what a town home used to cost just a few years ago.

Want to see how much negotiating room there is in your price range? Reply and I'll pull the real numbers for the areas you're watching.

Most of Utah isn't seeing prices fall the way Austin or Tampa have. But with more homes for sale than anytime in the previous decade, your home has more competition than it did a few years ago when the market was hot. Buyers are comparing every listing in your area before they decide which ones are worth seeing.

Pricing off last spring's comps is the fastest way to sit on the market. Listing your home based on what's actually selling right now, plus an offer like a rate buydown for the buyer, can bring in buyers who are feeling the pinch of 7% mortgage rates.

If your home sat on the market earlier this year without selling, that's something I help with often. A fresh strategy can make a big difference.

Thinking about selling in the next six months? Reply and I'll put together a pricing strategy based on what's selling near you right now.

Here to serve,

P.S. Curious what your home is worth in today's market? Reply with your address and I'll send you a free, no-pressure breakdown.