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Nationwide residence costs posted their first annual decline in over a decade in February, in line with new knowledge, in line with knowledge launched Thursday by Redfin.

The median United States residence sale worth declined 0.6 p.c between February 2022 and 2023, clocking in at $350,426, knowledge launched Thursday reveals.

The worth decline, nevertheless, gives little reduction for homebuyers right this moment, as mortgage charges proceed to hover close to 7 p.c and the standard month-to-month mortgage cost for right this moment’s homebuyer stands at a document excessive of $2,520.

The week ending March 2 noticed the typical for 30-year mounted mortgage charges rise to six.65 p.c, marking the fourth-straight week of will increase. The day by day common on March 2 was 7.1 p.c, in line with Redfin knowledge.

“Costs falling from a yr in the past is a milestone as a result of it hasn’t occurred because the housing market was recovering from the 2008 subprime mortgage disaster,” Redfin Deputy Chief Economist Taylor Marr mentioned in an announcement. “However it’s not shocking and in some ways, it’s welcome. Residence costs skyrocketed a lot over the previous few years that they had been prone to come down as soon as charges rose from historic lows. Mortgage charges rising to the 7 p.c vary was the straw that broke the camel’s again, dampening homebuying demand and resulting in sellers asking much less for his or her residence.”

Redfin economists predicted that the rise in mortgage charges seen throughout February may result in a chronic winter for the housing market. Charges dipped to kick off the yr, resulting in a quick interval of elevated exercise which led some to foretell an early spring, earlier than climbing upwards once more.

“Costs will most likely decline a bit extra within the coming months, however first-time consumers hoping to attain a serious deal this yr are possible out of luck,” Marr mentioned. “That’s as a result of so few owners are itemizing their houses on the market. Restricted stock and continued curiosity in turnkey houses in fascinating neighborhoods will maintain costs considerably propped up–and excessive charges will proceed to be successful on affordability.”

The rise in mortgage charges introduced the red-hot pandemic housing market of 2020, 2021 and the primary half of 2022 to a close to halt, slowing residence gross sales dramatically and edging many would-be homebuyers out of the market because of affordability issues. Some housing market specialists, reminiscent of a panel surveyed by Zillow, have predicted that the primary quarter of 2023 will symbolize a excessive level for mortgage charges, and that they may progressively lower all year long till they continue to be regular round 6 p.c, and that residence costs will climb steadily in response.

Residence costs dropped yearly in 24 of the 50 most populated United States cities, with the steepest drop-offs in widespread pandemic relocation locations reminiscent of Austin the place costs dropped 11 p.c, San Jose the place they dipped 10.9 p.c and Oakland the place they fell 10.4 p.c.

E mail Ben Verde