Here are the places in the US where home prices are falling the fastest

The once-booming tech haven of Austin, Texas, is now leading the pack in the fastest-falling home prices across the country, according to a new report.

Thanks to high mortgage rates and cooling demand, Austin property values ​​fell 3.5% last year, outperforming the top 100 US markets.

Austin’s recent years of rising property values ​​were fueled by a booming tech industry and attractive low state taxes. However, those glory days seem to be fading.

CoreLogic’s latest report paints a picture of a nationwide cooling in the housing market, with Austin being the most dramatic example.

Overall, home prices appreciated 4.9% nationally in May. But in some prominent cities, the story was different.

San Francisco was down 2.6%, while New Orleans was down 0.9%. In Florida, Cape Coral and North Port also felt the chill, with prices down 0.6% and 0.2%, respectively.

Rising mortgage rates to around 7% for a 30-year fixed-rate deal has put a damper on the market. In May alone, 16 of the 100 largest metros saw price declines, with El Paso, Texas; Gary, Indiana; and Buffalo, New York in the top five.

Despite the downturn, 34% of homes sold above asking price in June, a jump from the pre-pandemic average of 23%. This trend is driven by strong demand in high-priced, low-inventory markets.

About 100,000 borrowers were six months or more in arrears on their mortgages in May, a level not seen since before the financial crisis.

However, foreclosure rates fell to 0.2%, the lowest since early 2022, suggesting many late-stage delinquencies are being resolved.

The share of adjustable-rate mortgage (ARM) originations hit an annual high in May. ARMs, which have interest rates that fluctuate based on market conditions, are gaining traction with the rise of fixed-rate mortgages. Despite this, ARMs still make up only 5% of mortgages outstanding, a far cry from the 20% seen before the financial crisis.

In June, 8.6% of homes under contract were valued below their sales price, up from 10.7% a year earlier. This change returns appraisal gaps to pre-pandemic levels, with smaller starter homes more vulnerable to overvaluation by first-time buyers.

Sales of newly constructed homes fell 17% in the first half of the year, with only Portland, Oregon and Las Vegas, Nevada bucking the trend, each down 2%.

Investor activity also cooled, accounting for 23% of single-family home purchases in June, down from 28% in January. This is the lowest percentage of investors in two years, but still higher than pre-pandemic levels.

Existing home sales fell 19% in June from a year earlier, with an early seasonal slowdown likely driven by a rise in mortgage rates. However, pending sales in June rose 9% from 2023, hinting at a potential rebound.