The median home price in the U.S. dropped by 3.3% in March (after a 1.2% dip in February) — marking the largest fall in prices year-over-year since 2012, according to a new report from Redfin.
The biggest drop from a year before was Boise, ID at -15.4%, followed by Austin, TX (-13.7%), Sacramento, CA (-11.9%), San Jose, CA (-10.5%) and Oakland, CA (-9.7%).
“I was consistently busy in the fall, but things got really quiet in March after the collapse of Silicon Valley Bank,” said Boise Redfin real estate agent Shauna Pendleton in the report. “There’s this fear that everything will crash. There are bank failures, inflation, recession fears, mortgage-rate volatility, a war in Ukraine, spy balloons—some people are wondering if they should pull their money out of the bank and park it in a safe rather than spend it on a new home.”
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Out of the homes sold in the U.S. in March, only 28.5% sold for more than the final listing price — a steep decline from 54.1% in March 2022.
Rising mortgage rates have caused both buyers and sellers to stall, and new listings fell by 23.3% in March compared to a year prior. With fewer homeowners looking to sell, it’s sparked a lack of inventory, further contributing to the decline in home sales.
“One of my sellers recently got multiple offers on their home, but pulled the listing off the market when they found out their interest rate was going to double,” said Nashville Redfin real estate agent Jennifer Bowers, in the report. “There are a lot of homeowners who don’t want to give up their 2.5% or 3% rate for a 6.5% rate. Both buyers and sellers are having a tough time adjusting because rates are swinging up and down so quickly.”
Related: Some Banks Lost An Average of $301 on Every Mortgage Financed in 2022