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9 hours ago
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Housing market forecasters projected home prices to rise in 2025 because of limited inventory and the release of pent-up demand as mortgage rates moderate off their highs of the last few years.
However, recent data suggests home prices are trending in the other direction.
According to Altos, the weekly single-family pending sales price has fallen in five states on a 90-day average basis, and other states are trending in that direction.
So far, the price drops are minor. Oregon has the biggest decline at 0.9%, followed by Georgia (0.8%), Montana (0.2%), South Carolina (0.3%) and Texas (0.1%). Prices in three other states — Florida (0.2%), South Dakota (0.3%) and Louisiana (0.4%) — have grown, not fallen, but by less than 1%.
The cooling in Texas and Florida is notable because they were among the top destinations during the wave of migration set off by the COVID-19 pandemic, particularly the Austin and Miami metropolitan areas.
The median sale price of pending home sales for a single-family home in Texas has been trending downward since November, when prices were rising at a 2.6% clip. Prices have fallen three weeks in a row.
It’s a similar story in Florida but even more pronounced. Through December and mid-January, home prices consistently rose by 2.4%, but fell to 0% in just a month’s span.
It’s no secret what’s driving the trend. Inventory is jumping all over the country, including Texas and Florida, where single-family homes for sale are up year over year by 30.4% and 38.4%, respectively. Only one state’s inventory is down on an annual basis — North Dakota with an 11.7% drop.
Some states are experiencing an even higher growth rate in inventory, which will put downward pressure on home prices. Those include California (49.5%), Maine (43%), Arizona (42.6%), and Tennessee (38.7%).
Despite the rise in inventory, home sales have not yet shown meaningful increases. Total sales contracts pending are currently down 3.5% compared to 2024, and for most of the year they’ve lagged behind last year’s pace.
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