New homeowners lose $122,000 as housing prices drop

New homeowners lose $122,000 as housing prices drop, per Newsweek.


Recent homeowners throughout the United States are grappling with a swift decline in their property values.

Recent data indicates an average loss of $122,000 in home value in certain areas, signaling challenges to the American Dream.

The past year has witnessed a transformation in the American housing market, with property values experiencing a "freefall," as stated in a November study by Point2Homes. Individuals who navigated historic mortgage rates to acquire their homes are now contending with a market in retreat, witnessing single-family homes losing up to $223 in value daily.

In 2022, over 5 million homes were sold in the U.S., with a quarter of these transactions involving first-time buyers, according to a report from the National Association of Realtors.

Some of these new homeowners now find themselves in a challenging situation as the market value of their homes diminishes.

Point2 identified fifteen major markets in the U.S. that were particularly impacted on a year-over-year basis for both single-family homes and condos. Single-family homes in Memphis, Tennessee, experienced a decline of 17.1 percent, while homes in Chandler, Arizona, saw a more moderate loss at 0.6 percent, still ranking among the most affected. The repercussions of these losses are potent enough to pose a threat of negative equity to homeowners, turning the asset of homeownership into a financial liability.

It's not confined to these 15 markets; looking at the top 100 markets in the U.S., Point2 analysts observed smaller year-over-year price drops affecting values in 36 cities for condo owners and 25 for single-family homes. In terms of dollar amounts, the analysts highlighted significant deflation in San Francisco, where condos lost $122,500 in value over the past year, aligning closely with the city's median income of $126,187.

Even markets that previously appeared resilient are experiencing strain. New York City's boroughs, traditionally known for their strength, are witnessing a decline in value for both condos and single-family homes. In Manhattan, condo owners face the prospect of selling for nearly $70,000 less than last year's purchase price, while in the Bronx, homeowners could sell for nearly $40,000 less than last year's purchase price.