Castle Realty Group Inc

Mortgage Rates Rise Yet Again—Does That Mean Home Prices Might Fall?

Although home prices hover at a median of $415,500 nationwide, properties within a significantly lower price range have just started inundating the market.

The number of homes for sale in the $200,000 to $350,000 range has shot up by 20.6% compared with this same month last year. This growth spurt in affordable real estate outstrips all other price categories.

While homes in this price range run the full gamut, the median clocks in at $285,000—that’s a hefty $130,500 in savings compared with the median home price overall.

Where to find affordable homes

So where are all these modestly priced homes hiding? Mainly in the South, which typically has more affordable listings than other parts of the country. Nonetheless, the South’s recent surge in budget-friendly listings is a substantial increase from just a few years earlier. It now accounts for over half of America’s available inventory in the $200,000–$350,000 range.

“A big part of what’s driving an increased share of lower-priced homes for sale is growth in the South. “In fact, Miami and Tampa were the metro areas with the biggest inventory growth, and the state of Florida has a sizable 18% share of the nation’s supply of homes in this price tier.”

In February, the number of homes in Miami and Tampa priced between $200,000 and $350,000 shot up 67.4% and 31% respectively compared with the same month last year. This is particularly astonishing given overall median home prices in Miami and Tampa are quite high at $550,000 and $416,000 respectively.

Among the 50 largest metros, Dallas also experienced significant inventory gains in this price range, with the number of listings rising by 31.9% compared with last year. (The overall median list price in Dallas is $435,000.)

While homes in the $200,000–$350,000 price range showed the biggest jump in inventory, the second-fastest growth category, at 19.8%, are homes priced over $1 million.

“That said, more affordable homes has been the tightest price category in recent years, as the most affordable homes were snapped off the market first, economic data manager Sabrina Speianu in her analysis. “In 2021, when the market was very hot, this price category saw the largest decrease in inventory.”

What types of homes are for sale?

In Miami and Tampa, buyers will find that most homes in the $200,000–$350,000 price range are attached homes—meaning condos, townhomes, and row houses.

Dallas also saw a surge in single-family homes in this price bracket, closely followed by San Antonio and Houston.

However, despite this welcome upswing in affordable real estate, overall inventory levels remain below those of previous years.

“Home shoppers will have more choice than they did in recent years heading into the spring homebuying season, and in particular, more choice of lower-priced homes compared with last year,” explains Speianu. “But inventory is still not as plentiful as years past.”

Nonetheless, bargain hunters will feel more flush with budget-friendly options than they have in a long while. This chart shows the top 10 cities where buyers can find the most homes in the $200,000–$350,000 price range.

Eager to start shopping? Here are some sample listings for these cities, along with the overall median price in these metros so you can see how much you can save.

1. Miami, FL

Metro median list price: $550,000
1841 NW 51st St for sale for $329,990

affordable home

2. Dallas, TX

Metro median list price: $435,000
9918 Hustead St for sale for $225,000

3. Tampa, FL

Metro median list price: $416,000
3127 W Sligh Ave Unit 303B for sale for $225,000

4. San Antonio, TX

Metro median list price: $335,000
2135 Seven Pines St for sale for $250,000

5. Houston, TX

Metro median list price: $360,000
12223 W Village Dr Unit C for sale for $140,000

6. Orlando, FL

Metro median list price: $435,000
4324 S Kirkman Rd Apt 1114 for sale for $230,000

7. Atlanta, GA

Metro median list price: $409,000
2383 Perry Blvd NW for sale for $194,995

8. Oklahoma City, OK

Metro median list price: $323,000
3613 NE 30th St for sale for $245,000

9. New Orleans, LA

Metro median list price: $325,000
604 Esplanade Ave Unit 103A for sale for $215,000

10. Birmingham, AL

Metro median list price: $286,000
1325 Impala Dr for sale for $269,900

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