Home Prices

You know the old saying, ‘What goes up must come down.’? It turns out that might actually be true. Most Americans have watched with wide eyes as home prices practically skyrocketed over the last two years. At the start of Summer, the Fed implemented higher mortgage rates which essentially put the housing market into a cold shower to sober up. What we’ve seen since is a cooling on the home price surge. 

While we did reach a record high median home list price in May (at $425,000), that number has fallen over $10,000. In July, that number was “only” $413,800, according to the National Association of Realtors. Granted, that number is still up almost 11% compared to July 2021, but still offers a bit of relief to buyers in 2022. 

Like Clockwork

“We are going to see prices drop as we do seasonally,” says Realtor.com® Chief Economist Danielle Hale. “We tend to see smaller homes and sellers who are more willing to make a deal [in July]. In general, there are fewer buyers because they’re on vacation, getting ready for back to school, they’ve already found a home or decided to extend their rental.”

Despite this slow price decline, the number of actual buyers is also declining. In July, existing-home sales dropped 20.2% year over year. Buyers will return to the market as prices continue to fall, which may be entirely dependent on mortgage rates. The higher rates go up, the less money buyers have to go towards purchasing a home. 

To read more about how, why, and where prices drop during a recession, visit Realtor.com.