Mid-Pandemic Homebuying Hotspots Are the First to See Prices Fall in a Market Correction

Homebuyers are struggling to afford home purchases as high mortgage rates and elevated home prices continue to chip away at housing affordability across the U.S., and in order to appeal to a waning consumer base, sellers are offering more discounts than ever before. The top five metros seeing the most substantial home price cuts were formerly homebuying hotspots, but are now reaching their tipping points after recording unsustainable growth throughout the pandemic-driven Great Migration.

Home to red-hot markets like Phoenix, Arizona topped the list of the U.S. states with the largest price reductions in October after 40.4% of its listings were marked down, Realtor.com reports. Following closely behind are neighboring states Utah and Nevada, where sellers slashed prices on 36.8% and 32.3% of listings, respectively.

It turns out, sellers are slashing prices largely in the areas that had been hottest for the past two years. Markets that had become magnets for those fleeing the coastal population hubs, mostly in up-and-coming metros in the West and the South, are now seeing record levels of listing price cuts.

“The unifying thread among these states,” says George Ratiu, senior economist and manager of economic research for Realtor.com, “is they have all seen a significant influx of buyers of the last 2.5 years.”

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