In May, the median home price in the United States was $442,500, slightly up from $441,000 in 2023. However, there were several big cities where home prices dropped during that same period. Miami, in particular, saw the biggest decline with a drop of 11.2% year-over-year, bringing the median home price to $439,000.
The real estate market has seen a slowdown in homebuying, leading to price declines in many cities across the country. Despite the overall increase in the median sales price for the entire US, the homebuying process hasn’t become significantly more affordable for the average American since the previous year.
Factors such as consistently high mortgage rates and an overall increase in home financing costs have deterred prospective buyers, resulting in lower home prices in major US metros. This has created less competition for homes and, subsequently, price drops in various cities.
According to Realtor.com’s report, the higher mortgage rates compared to the previous year have increased the required household income to purchase the median-priced home. This has locked many Americans out of the market, but it has also created opportunities for those who can still afford to buy a home in their area.
Cities like Miami and Austin, which experienced a surge in demand during the pandemic, have seen homes staying on the market longer, prompting sellers to reduce their prices. In May, home prices in Miami and Austin experienced significant drops of 11.2% and 3.1%, respectively, compared to the same period the previous year.
Realtor.com analyzed data from 50 of the largest US metros to determine which cities experienced the largest price drops in May. Below are the 11 major cities with the most significant declines in home prices.