10 Cities With the Biggest Home Price Drops This Year

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In March, almost half of the homes for sale in North Port, Florida, dropped in price. Find out where to start your search for an affordable home. 

Right now, buyers are snatching up houses. Despite relatively high mortgage rates, there just aren’t enough pieces of the pie to go around. Low housing supply leads to high demand. Potential home buyers are acting fast to scoop up what few homes are still for sale.

But where to look? Recent Redfin data might have the answer. In March, 15% of homes for sale had a price drop. Here are the 10 cities with the biggest share of home price drops this year:

North Port, FloridaTampa, FloridaCape Coral, FloridaIndianapolis, IndianaSan Antonio, TexasDenver, ColoradoPhoenix, ArizonaSalt Lake City, UtahBoise, IdahoAustin, Texas

Here’s a little more color. For brevity’s sake, we’ll only examine the top five cities.

1. North Port, Florida (42%)

As of March, almost half of the homes in North Port got cheaper. Coastal homes exploded in price during the pandemic, so the price drops are likely a financial hiccup. Even so, the median sale price of a single-family home is barely cheaper than last year. Demand is high again, and the market in North Port, especially, is super competitive right now. The typical single-family home here sells for $375,000.

2. Tampa, Florida (41%)

Tampa is another coastal city where prices spiked once the pandemic began. Though many homes dropped prices in March, prices are still up 5.5% compared to last year. Houses are cheaper than their June 2022 peak, but if Redfin trends continue, Tampa prices might creep past their highs sooner rather than later. The typical Tampa home sells for $416,500.

3. Cape Coral, Florida (41%)

The Cape Coral housing market is somewhat competitive, but not competitive enough to lift month-to-month home prices. Redfin trends indicate that single-family home prices remain stable. Home prices here peaked at about $450,000, dipped in April 2022, and have hovered at around $400,000 since — good news for prospective buyers.

4. Indianapolis, Indiana (41%)

The Indianapolis housing market is on fire right now. The market is very competitive, with the average home selling in around 21 days — and that’s despite only a few buyers in general. Last year, the average home sold in six days, so this is actually slow for Indianapolis. Despite widespread price drops, the median selling price ($235,000) remains flat compared to February.

5. San Antonio, Texas (39%)

San Antonio houses are looking cheaper than they were last year, but they’ve been trending up since January. According to Redfin, the market here is less competitive than that of its Floridian peers. The typical San Antonio single-family home sells for around $280,000.

Mortgage rates are high compared to last year

The Federal Reserve rate hikes have led to predictably high mortgage rates, averaging around 6.5%, up from 2%-3% in 2021. Home buyers broadly recognize that loans are expensive right now. Many are waiting out the market, and sellers are pausing their selling plans.

But now isn’t necessarily “the wrong time” to buy. Financial guru Suze Orman has pointed out that rates are still low by historical standards. Before 2008, rates were even higher. In 2000, they averaged 8%, and in 1990, they averaged about 10%. By that metric, a 6% rate is still cheap.

The point is, you can slice and dice rates all you want. What matters is whether you can afford to finance a house: your house, your money, your future. Rates matter, but only regarding whether you can comfortably meet your housing goals.

Plus, the housing market is a fickle beast. It’s tough to predict month-to-month swings, though year-over-year trends can give us an idea of where the market is heading in specific cities listed on public databases like Zillow and Redfin.

Consider what you can afford to take out as a loan. Higher down payments and compatible mortgage lenders can soften the impact of raised rates. Shop around to choose the best-fit lender for your home-buying needs.

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