According to the National Association of Realtors(r), sales of existing homes fell for six consecutive months in July 2022. This was 5.9% less than the previous month, and 20.2% less than July 2021. Although the average home sale price is up by a lot compared to last, it is now down approximately $10,000 from the record June 2022 high.
It is possible that home values are declining in America with falling home prices and sales, rising mortgage interest rates, and growing inventory available for sale. Is it possible that home values may be declining due to slowing housing market activity in many cities?
Credit Karma did a study on home values over the past year and other key data points about housing such as inventory and how long a home is on the market before it sells.
The study revealed that, while the average home price is rising nationally, there are significant differences in home value appreciation between individual cities and their housing market.
Continue reading to find out if home values are falling or if their appreciation is slowing down.
Snapshot of Credit Karma Stat
The key findings about home values in America
The U.S. has seen an increase in home values year after year. According to Zillow data, the median U.S. home value increased by 17.1% from July 2020 to July 2021. It rose from $257,067 up to $300,939 in 2017. In 2022, home value appreciation was even faster. The median home value increased by 18.2% to $355,852 in July 2022, from $300,939 in June 2021.
Despite the solid national home value appreciation rates, major U.S cities have experienced significant slowdowns in home value appreciation.
Washington, D.C., had the lowest year-over-year increase in home values. The median home value of Washington, D.C. increased by 2.7% between July 2021 and July 2022, going from $689,033 up to $707,647. This is a vast improvement on the 7.7% increase in median home values during the previous period (July 2020-2021).
It is worth noting that none of the 250 largest US cities has seen a decline in median home values from last year. The most noticeable trend in many major housing markets is the slowing rate of home price appreciation compared with previous years.
Cities in which home value growth has slowed
Many cities have seen a marked decline in home value appreciation. Below is a table that shows 20 cities in which home value appreciation was the lowest between July 2021 and July 2022.
July 2021-July 20,22
|
City |
July 2021 median house value |
July 2022 median house value |
YOY home values change (%) |
| Washington, D.C. | $689,033 | $707,647 | 2.7% |
| Boise, ID | $509,981 | $526,050 | 3.2% |
| Arlington, VA | $808,247 | $836,806 | 3.5% |
| Minneapolis | $329,363 | $342,239 | 3.9% |
| Alexandria, VA | $608,467 | $638,861 | 5.0% |
| Oakland, CA | $933,730 | $981,287 | 5.1% |
| Philadelphia | $224,281 | $237,595 | 5.9% |
| Pittsburgh | $221,681 | $235,267 | 6.1% |
| Silver Spring, MD | $501,132 | $532,245 | 6.2% |
| St. Paul, MN | $274,693 | $292,905 | 6.6% |
| San Francisco | $1,478,496 | $1,576,808 | 6.6% |
| Boston | $695,033 | $743,093 | 6.9% |
| Concord, CA | $601,157 | $645,758 | 7.4% |
| Jersey City, NJ | $568,899 | $611,335 | 7.5% |
| Beaumont, TX | $137,334 | $147,840 | 7.6% |
| Yonkers, NY | $610,204 | $657,611 | 7.8% |
| Fairfax, VA | $662,817 | $716,498 | 8.1% |
| New York | $718,465 | $776,946 | 8.1% |
| Shreveport (LA) | $121,030 | $131,002 | 8.2% |
| Inglewood (CA) | $727,166 | $787,299 | 8.3% |
Notably, these 20 cities experienced the lowest annual growth in home values from 2021-2022. However, some experienced slower growth over the prior yearlong period of July 2020-2021. Here are some examples of slower growth between 2021 and 2022.
|
City |
2020-2021 growth |
Growth |
| San Francisco | 5.1% | 6.6% |
| New York | 4.0% | 8.1% |
| Shreveport (LA) | 4.7% | 8.2% |
However, for most major cities, the increase in home values over this past year was less than the previous year-over year period. Boise in Idaho is the most striking example. Boise’s median house value increased by 45.2% between July 2020 and July 2021 to $509,981 (from $351,320) Its median home value grew by 3.2% between July 2021 and July 2022.
An increasing inventory of homes for purchase
While home values aren’t necessarily falling, there are indicators that indicate that many housing markets are cooling. At the national level, inventory has increased for homes to sell.
According to Redfin data, inventory increased by 14.6% from an inventory of 882 335 homes in June 2021 to 1,011,013 houses in June 2022. Comparing that year-overyear change to the previous period (June 2020 to June 2021), when U.S. housing inventories plummeted 30.7% from 1,273,420 homes to just 882,335 houses, Redfin data shows.
The housing inventory can provide a good indicator of the market’s activity. Inventory usually falls when there is a lot of homebuying because all the homes that are available for sale have been sold. However, inventory can indicate a slowdown in homebuying, which could lead to an increase in homes for sale.
The greatest year-over-year increase in housing inventory from 2021 to 2022
|
City |
June 2021 for-sale inventory |
June 2022 for-sale inventory |
Year-over-year growth in inventory |
| Visalia, CA | 25 | 213 | 752.0% |
| Renton, WA | 80 | 220 | 175.0% |
| Thornton, CO | 102 | 277 | 171.6% |
| Boise, ID | 382 | 875 | 129.1% |
| Bellevue (WA) | 108 | 245 | 126.9% |
| Lancaster, CA | 220 | 457 | 107.7% |
| Elk Grove, CA | 111 | 228 | 105.4% |
| Vancouver, WA | 237 | 464 | 95.8% |
| Aurora, CO | 349 | 662 | 89.7% |
| Beaverton, OR | 101 | 190 | 88.1% |
In many cities, however, the number of home sales dropped from June 2020 to Juni 2022. Renton, Wash. was the city with the largest increase in inventory year-over-year. However, home sales declined by 22.3% in the same time frame.
These cities have a smaller population and a smaller housing stock. The table below shows the five largest cities that have homes available for sale in June 2022. It also includes the change in inventory from June 2021 to June 2022.
Largest stock of homes for sale in June 2022
|
City |
June 2022 inventory |
2021-2022 inventory change |
| New York | 17,424 | -8.6% |
| Chicago | 10,957 | 17.6% |
| Houston | 5,592 | -16.4% |
| Philadelphia | 4,730 | 4.8% |
| Las Vegas | 4,715 | 42.6% |
Although New York and Houston are home to many homes, the number of homes for sale in these areas is actually lower than the year before. In the meantime, Las Vegas, Chicago, Philadelphia, and Philadelphia have seen increases to their housing inventory.
Inventory trends show that changes are being driven by local forces that may not be consistent with the national story.
Home sales that saw their prices drop
Another useful indicator of housing activity is the proportion of homes on sale in an area that has experienced price drops. A slowing housing market may be indicated by cities with significant price drops on their housing markets. This is because real estate agents and homeowners are more willing to cut prices than allow them to sit.
Our study analyzed Redfin data and revealed 10 cities with the highest price drop of homes year-over-year.
The greatest year-over-year price drop in homes
|
City |
June 2021 % of active listings with price drops |
June 2022 % of active listings with price drops |
Year-over year change in active listings with price drops |
| Lansing (MI) | 1.2% | 31.6% | 2,577.6% |
| Orange, CA | 7.6% | 45.6% | 499.8% |
| Cary, NC | 6.4% | 37.4% | 482.4% |
| Mesquite (TX) | 8.3% | 47.4% | 468.4% |
| Grand Prairie, TX | 9.1% | 46.7% | 411.1% |
| Pomona (CA) | 5.5% | 27.5% | 402.5% |
| Rancho Cucamonga, CA | 8.3% | 41.3% | 395.8% |
| McKinney (TX) | 9.0% | 43.6% | 386.6% |
| Hayward, CA | 8.4% | 37.6% | 347.1% |
| Fontana, CA | 9.0% | 39.2% | 333.1% |
It may be noticeable that many California housing markets were included in this top 10. The median home value of all six California cities included in the table was also lower than it was in the July 2020-to-Jul 2022 period.
The number of days that a house for sale is on the market
The number of days on the market is another interesting statistic that can be used to analyze housing markets. Median days on the market refers to the time between when a property was first listed for sale and when it went off-market. An increase in median days on the market could indicate a slower housing market.
There has been a significant increase in the average number of days that homes are on the market before they are bought in some major U.S. cities. Here are the top ten cities that saw the largest increase in days on market year-over-year.
The greatest year-over-year increase of days on the market
|
City |
June 2021 average days on the market |
June 2022 average days on the market |
Increase in days on the market year-over-year |
| Aurora, IL | 5 | 43 | 760.0% |
| Naperville, IL | 6 | 48 | 700.0% |
| Chicago, IL | 15 | 54 | 260.0% |
| Woodbridge, VA | 7 | 16 | 128.6% |
| Moreno Valley, CA | 11 | 24 | 118.2% |
| Macon, GA | 11 | 23 | 114.3% |
| Beaumont, TX | 18 | 38 | 111.1% |
| Lancaster, CA | 10 | 21 | 110.0% |
| Palmdale, CA | 10 | 21 | 110.0% |
| Fredericksburg, VA | 7 | 14 | 100.0% |
This list features three cities from Illinois at the top. The median days on the market for suburbs like Chicago, Aurora, and Naperville has increased dramatically. Other top-10 cities have doubled or more their median days on the market.
Home prices drop
A decline in the home sale price can indicate a cooling housing market. Our study analyzed Redfin’s latest median home sale prices and identified the areas with the highest year-over-year increase in home prices.
The worst year-over-year increase in home prices
|
City |
June 2021 median sale price |
June 2022 median sale price |
Year-over-year change in median sale price |
| Yonkers, NY | $510,500 | $460,000 | -9.9% |
| Canton, OH | $140,000 | $127,250 | -9.1% |
| Arlington, VA | $707,500 | $667,500 | -5.7% |
| Saginaw (MI) | $118,500 | $115,000 | -3.0% |
| Alexandria, VA | $623,000 | $619,950 | -0.5% |
| New York | $810,000 | $810,000 | 0.0% |
| Salinas, CA | $653,000 | $665,000 | 1.8% |
| San Francisco | $1,510,000 | $1,540,000 | 2.0% |
| Lancaster, CA | $430,000 | $441,000 | 2.6% |
| Santa Clarita, CA | $745,500 | $765,000 | 2.6% |
Many cities from California were once again included in our top 10 list. The New York City area did not fare as well. Yonkers saw a drop in median home prices of nearly 10% over the past year, while New York City experienced no changes in median sales prices.
Methodology
This study doesn’t provide a definitive answer to the question of why home values are declining in certain cities. It’s a study of which 250 largest cities in the U.S. experienced the lowest growth in median home values between July 2021 and 2022. Also, an examination of other housing indicators to identify factors that influence home values in U.S. housing market.